In recent times, the insurance industry has been at the forefront of addressing some of the most pressing challenges of our era. From the devastating wildfires in Los Angeles to the gender pension savings gap, the role of insurance in mitigating risks and providing financial security has never been more critical. In this Insurance News Analysis, I am joined by Deborah McBrearty, Chloe Harmer and Belinda Djamson to delve into how data and AI is shaping the future of insurance.
The Los Angeles wildfires have been yet another stark reminder of the increasing frequency and severity of natural disasters. Alarmingly, only 25% of the losses from these wildfires are likely to be insured. Deborah highlights what the world could learn from New Zealand where 90% of homes are insured for natural hazards and damage.
Next, we look at how innovations in data and AI are revolutionizing the insurance industry, particularly in parametric insurance. One notable example is the use of satellite data to track rainfall levels in key coffee-growing regions as a means to providing immediate financial relief to farmers when adverse weather conditions hit.
Another critical issue we discuss is the gender pension savings gap. This gap, which sees women saving less for retirement compared to men, is a significant concern. In addition to that, we identified this gap was similarly found with Gen X. Insights from Chloe and Deborah highlight the importance of the pension industry’s role in providing financial education, personalized advice, and digital platforms in order to help women and younger generations better prepare for their financial futures
Lastly, we looked at the growing instances of insurance fraud, highlighting the critical need for sophisticated methods to combat it both at the applications and claims stages. Belinda gives us an understanding of steps insurers could take, using data and AI, to detect and prevent fraudulent activity.