French-based insurer and reinsurer SCOR has predicted in a recent report that the re/insurance industry is likely to be profoundly altered by the growth and integration of intelligent machines, which will bring both significant opportunities and risks for companies.
SCOR noted that the development of intelligent machines has recently been accelerated by advances in technology, algorithms, and infrastructure, and that increasingly powerful and autonomous machines are becoming a daily reality as the re/insurance industry embraces their benefits.
Better sensors, hyper-connected digital infrastructures, Big Data, strong algorithms that support artificial intelligence (AI), and machine learning features are all contributing to advancing machine intelligence, and carry transformative potential for re/insurance business.
The advantages promised by self-driving cars and drones have already become a topical issue, but intelligent machines are yet to be applied to many other fertile sectors, such as marine, aviation, mining, agriculture, manufacturing, and healthcare.
SCOR also expects intelligent machines to reshape re/insurance risk profiles and business models, and to create new opportunities as corporations increasingly look to protect themselves against new exposures and interruption risks.
Re/insurers will have to recognise how these technologies create new tail risks, and consider how shifts in the industry will affect the their legal, social, economic, and operational environments.
SCOR stressed that re/insurers must be set to react proactively, and to anticipate the impacts of intelligent machines on insured persons and goods, as well as on risk profiles and lines of business.
Victor Peignet, Chief Executive Officer (CEO) of SCOR P&C, commented: “Human life and society as a whole are undergoing a deep transformation, driven by the accelerating impact of new technologies entering into daily life, with artificial intelligence and machines learning being at the forefront of this transformation.
“Because of the dependencies on data and connectivity the risk landscape is rapidly evolving. Protection needs are changing, as are the ways and means to access, purchase and distribute products and services. This transition will lead to certain business models and lines of business becoming less relevant and others obsolete.
“At the same time, it will offer opportunities for new business models and new products. At this juncture, the challenge for the (re)insurance industry is to adapt and bring to market innovative solutions for regenerating the business.
“SCOR is fully mobilized to address these challenges, partnering with its clients in new ventures to assess and anticipate the structural changes to come.”