PRODUCED BY:
SPONSORED BY:
INTERVIEW WITH
Syed Hadi
Head of Risk and Compliance
Innovating Insurance: Understanding Emerging Risks in an Uncertain World
How important is technology to the future of insurance?
Technology will change the shape of the insurance industry going forward. Insurance companies have traditionally followed the same innovations as banks but are slower to adopt them. So you only need to look at the increased technology adoption rate in banks to see that insurance companies will soon follow suit. We will soon see better structured models in insurance, powered by AI, that are far more competent at predicting environmental, social and governance issues than a human being can ever be. This is because human prediction relies on historical data, typically from the past 100 years, which does not give a true picture of what is upcoming. AI and other forms of computer-based capture will give a far truer picture of the coming days.
We will soon see better structured models in insurance, powered by AI, that are far more competent at predicting environmental, social and governance issues than a human being can ever be.
The greatest challenge facing the insurance industry right now is the global climate crisis.
What is the greatest challenge facing the insurance industry?
The greatest challenge facing the insurance industry right now is the global climate crisis. Recent examples include the flooding in Pakistan and extreme cold in the United States of America. What is unique, and the reason that climate is the biggest risk, is that the crisis affects every country in the world, but in a different way. Some experience extreme heat, whilst some experience extreme cold. These large scale catastrophic events are also incredibly hard to predict, which is why changes in climate pose such a challenge for the insurance industry.
How will self-driving cars impact the insurance industry?
Whilst the production of electric and self-driving cars may be better for the environment than their petrol or diesel predecessor, they pose a very interesting challenge to the insurance industry. It used to be that when accidents occurred there was a clear process to establish blame - identifying the human driver at fault. But with self-driving cars, it becomes much harder to attribute blame. There are many internal systems in the cars that should help identify the fault, but often overlap and conflict with one another. And from there, what human is then responsible for the fault? Is it the driver or the maker of the car software? Or could there be a factory worker who has installed something incorrectly? So whilst the cars themselves are getting smarter, insuring them still needs to catch up.
It used to be that when accidents occurred there was a clear process to establish blame - identifying the human driver at fault. But with self-driving cars, it becomes much harder to attribute blame.