Insurers to gain new strategic options from the use of AI
The rapidly growing capabilities of artificial intelligence are set to play an increasing role in the insurance industry, a leading executive has said.
Patrick Tannock is the chief executive officer of Axa XL’s insurance operations in Bermuda and chairman of the Association of Bermuda International Companies.
He said: “There is a big relationship in insurance between artificial intelligence and big data. Artificial intelligence is absolutely critical to optimising the powers of big data, and in insurance those who can harness the data to get a better handle on predictability will get a competitive advantage.”
Mr Tannock added: “The real potential of AI is not just in automating existing processes or expanding existing capabilities.
“The real power of AI in terms of potential is actually being able to do things that we haven’t previously been able to do. We believe that there’s going to be new strategic options that will emerge that will materially differentiate from gut feel and previous experience. I think the future is very interesting in terms of where we are.”
He said: “I think it is going to help us to work smarter, and I think it is going to help us to work more efficiently as well.”
Mr Tannock was speaking to Meg Green, the managing editor of Insider Engage — the magazine-style sister publication to Insurance Insider, Inside P&C and Trading Risk — at the recent Bermuda Risk Summit.
During the interview, he also discussed the need for the industry to attract, develop and promote diverse talent and be the best advocate of its own value proposition.
Mr Tannock pointed out that while there’s a global challenge when it comes to recruiting high quality talent, this is not real issue for Bermuda.
He said the local trade industry groups such as the ABIC, ABIR and BILTIR have done a really good job when it comes to increasing awareness of potential careers in insurance.
He also noted that “International Business, specifically Insurance, plays such a critical role in terms of being the economic engine that drives our country that there is no shortage of people trying and wanting to get into the industry”.
“The challenge for us,” Mr Tannock said, “is to make sure that there is equitable access for all people, irrespective of background or demographics, to actually participate in the industry and once they get into the industry making sure they have an equal opportunity to survive and reach their full potential. There’s no sense in attracting all these people to the industry and then they don’t feel welcome, they don’t feel supported, there’s no sponsorship or any of that stuff.”
Mr Tannock said: “On a macro basis, when I look at it from a global basis, I think the insurance industry’s got to do a much better job of being their own best advocate for their value proposition in terms of why insurance is such a great career.”
He added that the search for talent needs to be more far-reaching.
Mr Tannock said: “We need to stop going to the same places all the time. Sometimes we don’t even look at historically Black colleges as a source of potential people who might be interested in getting into the industry.”
There are 107 colleges in the United States that are identified by the US Department of Education as Historically Black Colleges and Universities, or HBCUs.
He added: “And you’ve got to pay the people. You can’t say that you’re trying to compete with other industries, and they’re paying multiples of what we’re paying and then expect the young people to come into the industry.
“There’s a lot of low-hanging fruit in terms of what we could be doing differently and better to attract the next generation of talent, but I believe it’s out there for the taking.
“We just have to think creatively and differently about how we want to tap into that source of talent.”
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