Tools can help mitigate catastrophe risk
Artificial intelligence and machine learning allow you to prevent the effects of problems
The insurance industry is facing the most pressure of change due to catastrophic events around the world, Microsoft’s US financial and insurance industry expert Mark Crow said at InsurTech Connect (ITC) in Las Vegas. “There are a number of scenarios that impact the sector, from climate catastrophes to macroeconomic issues such as inflation, recession and high interest rates,” he said.
In the specialist’s view, the sector as a whole – insurance companies, brokers and service providers – has to prepare for scenarios that will become increasingly complex. “New technologies can help, but you need to know what is really relevant and how to apply it,” he explained.
For Microsoft insurance specialist Brian Cartwright, “from a catastrophe perspective, we’re going to have bigger and more frequent events.” According to the executive, “to prepare we need a lot of data and computational power”. Cartwright pondered that the use of tools such as artificial intelligence and machine learning can improve the ability of insurers to prevent on a larger scale the effects of many problems, such as, for example, residents leaving areas with predictions of potential catastrophes.
Microsoft’s general manager of insurance and financial services for the US, Kim Vogel, emphasized the importance of using technologies correctly. “Modernizing risk [assessment] models is key,” she said. “Well-applied artificial intelligence can help refine risk underwriting using alternative data,” she exemplified. Artificial intelligence systems can also help identify behaviors, explains Vogel. “Microsoft has a consumer insights platform that, for example, analyzes the propensity to purchase, or can even identify a tendency to fraud even before there are specific indications.”
Regarding other trends for the insurance market, Crow sees the possibility of the metaverse being part of the channels of companies in the sector. “We’ve had a lot of inquiries, even from older insurers, about the metaverse,” he said. “Virtual reality can increase interactivity with [distribution] agents and also bring in people with some kind of restriction, by allowing them to interact virtually with consultants and brokers.”