Insurance companies want AI to check up on you

car insurance

writer icon Roy van de Sande     Marcel Langthim   |   Tech     🕐 29. May. 2018

Insurance companies want to use Artificial Intelligence (AI) to improve their own policies. The claim is that advances in technology will enable them to offer customers cheaper and more personal insurance policies. Cognizant is one of the companies to offer the AI Services within Digital Business, Operations and System & Technology. They are a strong believer that AI is able to improve on the current business models. Cognizant also states that ''for AI platforms to solve business problems, they need to be exposed to huge volumes of domain-specific information covering all possible business scenarios.''. However, this need for AI to access huge volumes of information does not sit well with everyone.

Social Dilemma

NRK spoke to Catharina Nes, Senior Vice president of the Norwegian Data Protection Authority, talking about how insurance companies must assess how far they can go.

"You become more aware of how you behave to get a favourable price. This can of course be good. But it can also mean that you cannot do completely legitimate things that you would otherwise do. There will be an existence where everyone will live on the narrow path.''

The advancing technology of AI and how insurance companies try to use this technology is becoming a social dilemma, as many people will be happy to save money on their insurance, but not everyone is aware of the associated cost. 

Laura Shin, a writer for Woman@Forbes, wrote an article back in January 2015 questioning the wisdom of using AI in this way. Is it truly worth giving up personal information in order to get a cheaper car insurance? Shin brought up Metromile, a startup company that offers cheaper insurances based on the number of miles driven per year, provided you allow your car to be tracked with the help of a tracking device. 

In March 2017, Alston Ghafourifar, CEO of Entefy, warned consumers to pay more attention to the data that insurance companies collect. With technology such as in-home monitors and wearables, insurance companies are able to collect even more information from individuals. Ghafourifar warns that is no longer a merely hypothetical idea that people will be monitored in their own homes, and asks  "Do you want your healthcare provider receiving a real-time notification of your late-night snacking?".

The other side of the coin
Lars Erland Leganger, of Norwegian insurance company Sparebank1, spoke to NRK about the potential benefits of AI. ''One can, for example, alert a customer that a flood is on its way towards their house, or that they are moving [around] in an area where there is a lot of pickpocketing.'' 

Leganger believes that there could be a future where people are forced to share more personal information in order to get a better price on their insurance. However, he also states that "One should respect that not everyone wants to share such information with their insurance companies, but if someone would like to [do so], then I think that companies should face the challenges and be ready with the security services." For now, Sparebank1 is not willing to offer these services, but ''it may be natural to test it on a smaller group of customers first'', says Leganger.

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