AI may take time to reach fullest potential in insurance: Panel

NEW YORK — Artificial intelligence could become a powerful tool for the insurance industry but may take some time to reach its fullest potential, according to a panel speaking Wednesday at the 40th Annual S&P Global Insurance Conference.

Doug McElhaney, Arlington, Virginia-based partner at McKinsey & Co., said AI offers the ability for vastly increased precision.

“What’s emerged is the ability for a variety of different analytical techniques and models to really get super precise about risk prediction, about understanding the nature and scale of risk and then how to navigate it.” Mr. McElhaney said. “I can get really precise about how I manage that risk, how I price it.”

One such example is using computer visioning technology to identify physical attributes of an insured property or structure with much greater precision, said Adrian Jones, New York-based chief of staff in international & global markets at Acrisure LLC.

“There’s tremendous opportunity in underwriting,” Mr. Jones said, adding he also sees promise for basic promise automation and the claims sector as well.

Frank Schmid, Stamford, Connecticut-based chief technology officer at General Reinsurance Corp., called AI a “general purpose technology,” similar in its impact to electricity or the steam engine.

He noted the full adoption of electricity “took decades in the United States,” and that the evolution and adoption of AI will grow with the development of downstream applications for the technology, much in the same way as electricity.