INSURTECH
" How do insurers gain enough insight into changing weather patterns to reduce premiums and get their most vulnerable customers covered again ? AI could hold the answer "
58 with flooding insurance has fallen by 15 % in the past decade , as working class families decide to take the risk in the face of rising premiums due to increased uncertainty and risk . The cost of insurance has been rising by between 5 % and 7 % year-on-year since 2011 and , according to Dick Thomas , a 69-year-old retired laborer in Craig , Missouri , whose family home flooded last year , if he ’ d bought flood insurance , We wouldn ’ t [ have been ] able to eat . You ’ ve got to do what you ’ ve got to do . We took a chance , and it bit us .”
So , how do insurers gain enough insight into changing weather patterns to reduce premiums and get their most vulnerable customers covered again ? AI could hold the answer .
According to Deloitte ’ s recent analysis , “ advanced analytics could further help companies assess historical weather records , insured property data , and assumptions regarding future climate conditions to improve risk selection and pricing .”
The combination of AI with the growing number of Internet of Things ( IoT ) devices around the world is allowing companies and scientific institutions to better track and understand global weather patterns . Ben Dickson recently wrote for The Next Web that “ ubiquitous connectivity enables us to aggregate that data in cloud servers for further processing by machine learning algorithms .” This aggregation of data for AI analysis allows insurers to better understand the risks facing their customers and tailor their offering accordingly .
APRIL 2020