Life Insurers Offer AI Startups a Rich Vein of Data to Mine
Traditional life insurance companies and cutting-edge tech startups may at first appear to be unlikely bedfellows, but it doesn’t have to be the case. You might find it difficult to picture the two working as one, owing to their very different approaches to doing business. However, these two seemingly disparate industries could and should work together for their mutual benefit, as we’re about to discover. In this report, we’re examining what each industry can offer the other in a symbiotic relationship tipped to yield big rewards.
What Can Life Insurance Companies Offer Tech/AI Startups?
From both a risk appetite perspective and the way in which they prefer to conduct business, life insurance companies tend towards the traditional, and that’s an understatement. So you might find it difficult to imagine such companies teaming up with a group of young AI nerds on a mission to change the world as fast as they can. Nevertheless, there is one very good reason for tech startups in general and AI startups in particular to cultivate close working relationships with well-established life insurance companies worldwide. Data.
Life insurance companies with long, storied histories have accumulated a vast treasure trove of data on mortality, health and human behaviour. This dataset has yet to be fully utilised, and at a time when AI companies are hungry for data on which to train their models, it’s becoming increasingly difficult to justify the delay. Yes, the life insurance industry is more formal, more conservative and less flexible in its approach to business than the tech/AI industry. But with industry players from both sectors having so much to gain, it’s time to get serious.
It’s time for AI startups to form mutually beneficial relationships with key life insurance companies and put all the data they have collected and collated to good use.
But What’s in It for the Life Insurance Companies?
Life insurance firms have collected data on their customers for decades, or even centuries in some cases. If these conservative organisations are to be persuaded to share this valuable information with AI/tech startups, they need to be convinced it’s worth their while. The volume and quality of data we’re talking about is off the charts; the potential rewards for insurers need to be as well. Fortunately for us all, the potential rewards are most certainly off the charts! The most powerful AI/ML models will be able to process and analyse these vast datasets and provide valuable new insights for life insurance underwriters.
AI startups can develop predictive underwriting models in partnership with insurers, leading to improvements in mortality prediction, fraud detection and pricing. With the power of the latest AI models, life insurance companies will be able to evaluate potential policyholders’ health with greater accuracy, detect fraudulent activity faster and calculate profitable premiums more efficiently.
What Are the Reasons Behind the Delay in Utilising Life Insurance Data?
There are several key obstacles currently hindering attempts to utilise the life insurance industry’s huge data warehouses:
- Incompatible IT Systems
- Inflexible Regulations
- Manual Underwriting
In addition, there is an embedded cultural aversion to adopting cutting-edge technology in the life insurance industry.
Growing Stronger by Working Together
If we as human beings are to benefit from everything AI models promise, we need to train them on the biggest and best datasets available, which must include those possessed by major life insurance organisations. So we need to overcome the roadblocks outlined above with as much speed as possible. By working together, the life insurance and tech industries, and the entire human race, has much to gain.
