A blog post by Anil Celik.
As February turning to March, we were in Dubai to talk about latest developments in the insurance industry. Global Reinsurance has hosted and sponsored the event.
During the event, Lloyd’s very own Inga Beale made a very bold statement: Insurance sector is “sleepwalking” into a new world. It was bold but promising as she was questioning the simplest things they could change within Lloyd but why would it take them to months if not years. She mentioned that around 40% of their all costs are expenses. It’s not every day a leader of one of the largest players in the industry stand up and criticize her own company.
The next day was spared for workshops and panels, where a smaller group of individuals discussed the future of insurance. “How can we, as an industry, can sail the wave of 4th Industrial Revolution?” was the question of the day.
I had the pleasure to talk about how UrbanStat is helping insurance companies to automate risk selection processes by using machine learning. Global Reinsurance has covered the presentation and focused on how we bring AI and human intution together. I’ve shared a case study, where we improved the loss ratio of an insurance company’s commercial portfolio. The audience was young, the questions were on point. It looks like machine learning has been making its way around the industry. That makes us even more excited.
Later in the evening, I’ve joined a panel as a speaker with very distinguished experts; Cyber Crime specialist Peter Hacker, Dr. Sabih Khisaf and Bibop Gresta from Hyperloop Transportation Technologies, Frederic Desitter from Arabtec Holding and Matteo Carbon from Insurance Observatory. Mike Jones from Strategic RISK has done a great job summarizing the panel. During the panel, I have focused on two main ideas on 4th Industrial Revolution. I believe that automation will bring job losses and governments around the globe will have to come up with new ways to provide a sense of purpose to their citizens. We need to make basic income feasible for our economies, as most of the jobs would be lost and there would be no replacement for a good portion of those jobs. The second topic that I have emphasized was how automation and IoT will create new risks and opportunities for insurers. Insurance companies often measure risk by looking at the history, analyzing the risk once every year and coming up with terms and prices for the insurance policy. I believe that this approach will change dramatically as we might find new ways to measure risk, manage it and prevent claims in real time. This brings the question of should insurance companies stay as insurers or should they become providers of a new type of services to the businesses? Hidden behind new threats lie the new opportunities.
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