30 May Tällt reports on AI disruption in insurance
In a newly published report, Tällt Ventures has outlined its top insurtech disruption trends for the year 2017. In particular, the report highlights the potential applications for Artificial Intelligence (AI) across the entire value chain of the insurance industry, characterizing it as an important and inescapable innovation.
Tällt Ventures, an expert provider of data intelligence that tracks more than five million start-ups worldwide through the observation of current, emergent, and disruptive trends, as well as analysis of corporate innovation activity, recently published a new report entitled, Insurtech disruption trends 2017: Artificial Intelligence.
In its new report, Tällt defines artificial intelligence, or AI, as, “an umbrella term for technology capable of making intelligent decisions rather than just providing analysis of data and model-based prediction. AI is an extension to the human brain – that is, it should be technologically capable of simulating the processes of the neural activity of the human brain, at least to some extent.” It further stresses that AI should not be considered a singular subject area, but rather, one which includes innumerable examples – machine learning, cognitive computing, deep learning, and natural language generation, for instance.
Investments in AI
To introduce the subject, the report begins by defining and outlining the term ‘artificial intelligence’, touching on historical aspects, and further connecting the topic to the insurance industry of the modern day. Subsequently, Tällt presents the findings of its analysis of ‘smart money’ investments in insurance-related start-ups over a recent 24-month period, as pictured in the image below. The image offers an apt visualisation of the rising interest in AI tech ventures within the sector.
In addition to visualising the recent uptake in AI related insurtech investments, the report also offers insight into Tallt data, which tracks more than 100 ventures currently leveraging the power of AI within the insurance industry. Notably, the top three best-funded AI ventures all apply artificial intelligence solutions to claims technology. The table below indicates the top ten best-funded ventures either solely or largely focused on AI, including the disclosed total funding amounts to date.
AI: an inescapable innovation
One thing the report makes clear is that AI offers limitless potential applications for the insurance industry. With this in mind, it stresses that artificial intelligence is quickly becoming an inescapable innovation. To summarise the key findings:
- Considering the current level of understanding around AI, implementation aimed at providing full autonomy across entire verticals in insurance is, for the time being, both unfeasible and negligent. For this reason, a combination of human input and creativity with machine intelligence may offer the industry significant improvements to service value at this time.
- The capabilities of AI are expected to improve drastically in the next five years. The application potential and capabilities of AI systems are likewise expected to improve exponentially as they learn from their interactions with the environment and the data they are fed.
- Going forward, interpretability of AI decision outputs must be a priority in further development of machine intelligence. These decisions have consequences for a variety of stakeholders including customers, regulators, employees, and shareholders. Applications of AI must allow trust and interpretation of not just individual predictions, but also the models themselves.
- Significant improvements in efficiencies, customer interaction and risk selection are within the reach of insurers able to apply AI to their operations effectively. AI ventures are now scaling at an unprecedented speed and commanding multi-billion dollar valuations, and its time insurers started to pay attention to these innovators.
To read or download [PDF] the full Tällt Ventures report - Insurtech disruption trends 2017: Artificial Intelligence - click here.
