Artificial intelligence to boost insurance
(Bloomberg) -- It was hard to tell whether hope or fear was the predominant sentiment about the future of artificial intelligence, according to a panel discussing the state of the field at the World Economic Forum in Davos, Switzerland, Wednesday.
A.I. systems are rapidly becoming more capable, the panel - - which included Ya-Qin Zhang, president of Chinese search engine company Baidu Inc., and Matthew Grob, the chief technology officer at Qualcomm Inc. -- agreed: they’re able to learn from analysing large data sets and they can increasingly discern human emotions by monitoring facial expressions and natural language.
A.I. researchers Andrew Moore, the dean of the School of Computer Science at Carnegie Mellon University, and Stuart Russell, a professor of computer science at the University of California, Berkeley, were also on the panel and concurred that as a result, A.I. is likely to vastly improve human lives in the coming decade.
But the researchers and executives voiced concern about possible downsides ranging from economic displacement to computers that escape the ability of humans to control them with potentially dire consequences.
What’s next for artificial intelligence
Using A.I. to improve search engine results has the potential to transform search from a $1 trillion industry today to a $10 trillion industry, Russell said. Zhang said Baidu is already beginning to apply artificial intelligence to insurance and loan underwriting, where he sees real possibilities for such systems to better assess risk. "In insurance and consumer loans, A.I. and machine learning can help you identify all the patterns to help you reduce risk," Zhang said.
Zhang also said he worries that as machines get smarter, people are in some ways actually becoming less smart than they once were. Already we don’t have to remember as much, because we rely on search engines and information stored on our mobile devices. Soon we might forget how to drive thanks to autonomous driving systems. This is fine, Zhang said, so long it makes us more efficient by freeing up our brains for more meaningful tasks. But he worried we might squander this new mindspace. He also fretted about what would happen if one day some of these systems failed. Would people be able to function?
At the same time, a growing number of professions are likely to be increasingly squeezed by A.I., including many white-collar jobs once thought immune to automation, such as law and even medicine, Moore said. He predicted there would be far fewer lawyers and doctors in the future, while there might be more jobs for teachers of young children or nurses, who could use artificial intelligence to aid their work while not being displaced by software.
Russell said that machines with general intelligence capability might not be that far off and that the world ought to devote serious thought to how to govern such machines -- an idea Elon Musk and theoretical physicist Stephen Hawking have supported in the past, being co-signatories alongside Russell on an open letter entitled Research Priorities For Robust and Beneficial Artificial Intelligence.
He said one could not predict the speed at which A.I. will develop. "You can’t use Moore’s Law to predict how quickly this will happen," he said, adding that it might take just a few breakthroughs to create general intelligence -- and that breakthroughs were by their very nature unpredictable. "The possible risks from building systems more intelligent than us are not immediate but the need to think about how to keep such systems under control and make sure the decisions they make are beneficial to us, that needs to start happening now," Russell said.
Insurer backs NZ city’s growth with key signing
Vero New Zealand has signed a new tenancy agreement with Ngai Tahu Property to take office space in central Christchurch, becoming the latest insurance company to pledge its support for the earthquake-stricken city’s redevelopment.
In November, insurance broker Crombie Lockwood signed up for space in the new
PwC Centre currently under construction, on the corner of Cashel Street and Cambridge Terrace.
Vero’s new offices will be in the new King Edward Barracks development at 48 Hereford Street.
Vero CEO Paul Smeaton said the company had played an important role in the Christchurch rebuild.
“Recommitting to office space in the Christchurch city centre clearly demonstrates our support of the re-establishment of the city, and our confidence in its future.
“The 48 Hereford Street building will provide a fantastic new office environment for Vero and Asteron Life employees in Christchurch, and return them to the heart of the city after working from temporary premises in Washington Way since February 2011.”
The new development includes two office blocks in Christchurch centre, close to key landmarks, amenities and transport with the precinct-style development also featuring a landscaped central park.
Vero will occupy half of level 4 of the building which will face onto Cambridge Terrace and Hereford Street.
Vero said the first stage of the King Edward Barracks development is currently under construction and expected to complete in February 2017.
Once it is completed, Vero will continue to operate from two locations in Christchurch, with the earthquake team based at premises in Hazeldean.
P/C execs expect Democrat US president, more M&A in 2016
America’s property/casualty insurance executives are anticipating much of the same in 2016, according to a new survey conducted during the Insurance Information Institute’s Property/Casualty Insurance Joint Industry Forum in New York.
The poll of 80 executives reveals that the industry expects static premium growth – apart from cyber lines – and continued merger and acquisition activity among American carriers.
Politically, a slight majority of respondents (55%) say they think there will be a new Democrat headed for the White House following fall elections.
Significantly more (79%) believe US economic growth will remain the same this year, with only 16% believing it will accelerate in growth. That should positively affect the P/C industry, though modestly, said Dr. Steven Weisbart, senior vice president and chief economist with the III.
“The US economy appears to be growing slowly but steadily, which translates into more economic activity and the addition of capacity. Personal and commercial insurance will also grow as a result, assuming none of the many potential adverse economic shocks develop,” Weisbart said. “As the economy inches closer to full employment, we may begin to see wage increases that outpace inflation for the first time in nearly a decade, primarily affecting the workers’ compensation line.”
This follows in line with P/C executives’ expectations – 68% see no improvement in workers’ comp.
One area they do foresee growth is in cyber insurance. Seventy-six percent of executives said they see the line as a major growth area for carriers in 2016, counteracting an otherwise static market.
Overall, a slight majority of respondents (53%) believe premium growth will occur at the same rate in 2016 as it did in 2015. Only 29% of respondents believe it will grow faster, and 18% foresee a slower growth in premium.
Perhaps for those reasons, 55% say they expect a continued increase in merger and acquisition activity among carriers this year.
However, whether such transactions are successful depends on regulatory approval, and many P/C executives foresee a stricter regulatory environment in the months and years ahead. In fact, 87% say they believe the federal government is interested in further expanding its oversight of insurers, on top of the establishment of the Federal Insurance Office through the Dodd-Frank Act.
