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These technologies are changing the insurance world

AI, big data,  blockchain and digital monitoring don’t stop at anything – including the insurance industry. Professor Hato Schmeiser of the University of St. Gallen explains the importance of these developments for the future.

Artificial Intelligence (AI)

…is the ability of a machine to learn independently and perform cognitive functions. Such machines can analyse and interpret data and solve problems on the basis of their findings. 


Hato Schmeiser’s assessment:
“I see a great deal of potential in artificial intelligence. Insurers have to handle vast amounts of data and the processes are extremely repetitive. Greater use of AI in the form of intelligent computers to provide advice – whether for concluding policies or handling claims – will simplify accessibility for customers. AI will also enable insurers to evaluate much more effectively which insurance products are typically of interest to a particular customer and whether they have a specific need, thus helping to create personalised insurance products.”


Big data

... as the name implies, refers to large volumes of data. These data must form part of a wider analysis strategy that leads to process automation, improved decision making, or other specific results.


Hato Schmeiser’s assessment:
“The main focus of big data is data volume, of course. By collecting, merging, and processing data correctly, we can gain new insights into customer behaviour. In practice, this will be reflected in more exact premium calculations or more accurate risk assessments.”



... refers to a decentralised database where currency units, securities, ownership or land titles are administered, for example. The basic difference between this new development and the current system is that there is no central database; data are distributed decentrally across servers.


Hato Schmeiser’s assessment:

“Unlike big data and AI, blockchain is a more mechanical form of technology. The aim of blockchain is to simplify internal business processes. However, this technology will be barely perceptible at the customer interface level.”



Digital monitoring

... is closely linked to the trend of personalisation. The principle is simple: for example, customers record their fitness data by counting their steps, and receive flexible, data-driven premium rates from their insurer in return. 


Hato Schmeiser’s assessment:

“Public debate often takes a negative view of this type of digital tracking. But in my opinion, this negative perspective is fundamentally wrong. Of course, data protection laws must be complied with. But suppose a customer has an accident in a vehicle that has an integrated tracking system. Self-diagnosis by the vehicle can provide a much more objective assessment of the course of events leading up to the accident. This kind of transparency is of benefit to both customer and insurer, and can promote mutual trust.”


About our expert: 
Prof. Dr. Hato Schmeiser is the Chairholder and Managing Director of the Institute of Insurance Economics IVW at the University of St. Gallen.