Insurance and AI: what impacts on costs?

The use of artificial intelligence in the insurance sector and of brokerage is to you beginbut a lot of developments are expected from here shortly significant with significant benefits also for end customers. One of the areas that will present the greatest positive repercussions is that of risk prevention, which the AI, thanks to data analysis, it will be able to make it even more precise, reducing the exposure of companies to impacts of accidents unexpected events and thereby also determining a desirable cost reduction of the policies.

Insurance and AI

But if they opportunity are undoubted, it is also a good idea to carefully evaluate the ethical and sustainability implications of this technology, and adopt the tools to make responsible and informed use of it. This was stated by the President of AIBA (Italian Association of Insurance and Reinsurance Brokers) Flavio Sestilli this morning in Rome, during the National Conference of the Association which represents approximately 80% of the market.

The event, entitled AI am a Broker – The evolution of the role of the Broker in the AI ​​era: potential, ethics and sustainable development”, brought experts together to analyze the role and impacts of Artificial Intelligence in the insurance and broker sectors. Speakers during the proceedings included: Riccardo Cesari, IVASS Councilor, Maria Bianca Farina, ANIA President, Umberto Guidoni, ANIA Co-General Director, Lorenzo Maternini, Co-founder and Vice President Talent Garden and Fausto Parente, EIOPA Executive Director.

Keynote speaker of the day Tiziana Catarci, Director of the Department of Computer, Automatic and Management Engineering “A. Ruberti” at the University of Rome “La Sapienza”.

Generative AI: 4.4 trillion impact on the world economy

According to a McKinsey study, generative artificial intelligence will have an estimated impact on the world economy between 2.6 and 4.4 thousand billions of dollars a year, more than Italy's GDP. In our country, calculates the Polytechnic of Milan, the artificial intelligence market has grown by +52% in 2023 and six out of ten large Italian companies have already started at least one development project in this direction.

Parallel to opportunity, however, during the work it was underlined that a careful assessment of the risks and implications associated with this technology is also necessary.

Algorithmic biases and the need to regulate AI

Topic explored in particular by Catarci: “Learning systems automatic are based on data created by humans. This means that any bias, conscious or unconscious, in them is built into the algorithms and sometimes even amplified. Algorithms, in other words, even if neutral, reproduce and increase existing inequalities or discrimination (gender, ethnic, cultural, social…).”

So how can we trust technology? “Awareness and training are essential. Along with digital skills, it is necessary to develop the cognitive tools to discern reliable information and analyze it critically and responsibly. Key in this direction is the contribution of classical disciplines (such as logic, philosophy, mathematics, history and Latin) as well as the critical thinking (ethics and morals),” added Professor Catarci.

Who then concluded by underlining: “The introduction of a regulatory framework relating to artificial intelligence is certainly a necessary step. When cars were invented, for example, traffic rules were also defined, as well as pedestrian crossings, traffic lights, airbags, etc. Many useful initiatives aim to introduce the ethical (and human-centric) vision of AI. However, ethics is not enough, because it is about individual responsibility while public policy is about social responsability. We cannot simply rely on the increased responsibilities of businesses.”

It is an epochal step forward in this direction, demonstrating the need for regulatory interventions on the matter the Artificial Intelligence Actthe world's first framework law on artificial intelligence which makes EU countries the first in the world to have a regulation governing the development, supply and use of AI systems across Europe.

Developments in the insurance sector

In insurance and brokerage, among the areas in which the greatest developments are expected related to AI there is that of risk analysis.

“Artificial intelligence will allow the offer to be sophisticated and personalized as never before, if not with a very important and costly commitment of time and resources” – declared President Sestilli – “Through artificial intelligence, I can, for example, analyze the satellite images and evaluate the maintenance status of the roof of a property, or calculate the specific local frequency of adverse climatic events or the concentration of risk in a specific location.”

But not only this. “AI can already, and will increasingly be able to, make processes in our sector more efficient, especially simple and repetitive ones, as well as improve the management of customer relationships – thanks to chatbots and claims management systems – and allow operators to identify new targets thanks to better and adequate analyses.”

Even in the insurance and brokerage sector, added Sestilli, “various potential implications must be considered, in particular the management of personal data, the ethical implications but most of all the risk of incorrect information. We must try to be more than sure that everything the AI ​​processes is correct. The controls must be stringent and strict.”

“The revolution based on data stored and managed by AI in the world, in the economy and in our market has begun, we are starting to experience it now. I believe it will take decades to understand it in all its complexity. As professionals and managers we will have a fundamental role, in some ways new and, certainly, we will be linked to constant and very fascinating continuous learning”, concluded Sestilli.