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Artificial Intelligence: Implications for Social Inflation and Insurance

Author

Listed:
  • Kevin H. Kelley
  • Lisa M. Fontanetta
  • Mark Heintzman
  • Nikki Pereira

Abstract

Artificial intelligence (AI) has the ability to enhance the insurance industry's value chain by altering relationships, reinventing business platforms, and expanding hidden data. Insurance companies will apply AI to greatly enhance large data analytics, evolve algorithms with transactional data faster, and combine data in new ways to discover better underwriting risks and appropriately price the risk of various insureds based on the true value of their business risks. This article explores how AI will have a significant impact on the workforce, jobs, and furthermore how the elimination of jobs will potentially exacerbate social equality gaps on a global scale, leading to a shift in culture and increased social inflation, thus impacting the insurance industry as well as its customers.

Suggested Citation

  • Kevin H. Kelley & Lisa M. Fontanetta & Mark Heintzman & Nikki Pereira, 2018. "Artificial Intelligence: Implications for Social Inflation and Insurance," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 21(3), pages 373-387, December.
    • Handle: RePEc:bla:rmgtin:v:21:y:2018:i:3:p:373-387
    DOI: 10.1111/rmir.12111
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    Citations

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    Cited by:

    1. Martin Eling & Davide Nuessle & Julian Staubli, 2022. "The impact of artificial intelligence along the insurance value chain and on the insurability of risks," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 47(2), pages 205-241, April.
    2. Christian Eckert & Christof Neunsinger & Katrin Osterrieder, 2022. "Managing customer satisfaction: digital applications for insurance companies," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 47(3), pages 569-602, July.
    3. Emer Owens & Barry Sheehan & Martin Mullins & Martin Cunneen & Juliane Ressel & German Castignani, 2022. "Explainable Artificial Intelligence (XAI) in Insurance," Risks, MDPI, vol. 10(12), pages 1-50, December.
    4. Jorge Andrés-Sánchez & Jaume Gené-Albesa, 2024. "Not with the bot! The relevance of trust to explain the acceptance of chatbots by insurance customers," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-12, December.
    5. D. V. Bryzgalov & A. A. Tsyganov, 2022. "Consumer Limitations on the Digitalization of the Insurance Market and Ways to Overcome Them," Studies on Russian Economic Development, Springer, vol. 33(5), pages 539-546, October.
    6. Marta Ostrowska, 2021. "Does new technology put an end to policyholder risk declaration? The impact of digitalisation on insurance relationships," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 46(4), pages 573-592, October.

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