Machine learning, which is a branch of artificial intelligence that gives computers pattern recognition and computational learning capabilities, is gaining believers in the insurance industry.
A recently released study by analytics firm Earnix showed that machine learning is gaining global adoption and that the executives surveyed for the study expect “significant” change in the industry over the next three-five years as a result of this adoption.
Specifically, Earnix said in a statement that 54% of the almost 200 executives surveyed said that their organization was using machine learning to support predictive analytical modelling functions. Furthermore, 70% of those who deployed the technology applied it to risk modelling, while 45% used it to develop demand models, and another 36% employed it for fraud detection.
While adoption of the technology is still in its initial stages, Earnix asserted that the organizations that are using it have already realized some benefit from the applications of machine learning. Fifty seven per cent of the survey respondents reported that the technology improved the accuracy of their analytical models, resulting in better risk assessments, “and ultimately better decisions,” the company said.
However, users still have to deal with the reality of lack of knowledge and expertise with this pretty new technology, Earnix said. Of the companies that use it, 82% said their organization is “relatively inexperienced” with machine learning.
Earnix chief executive Udi Ziv said in the same statement, “The insurance industry has always been data driven and the use of machine learning is a powerful trend that will quickly become a competitive edge for those who embrace it.”
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