Page 15 - Turkinsurance Digital Magazine

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Making the business of insurance more plants and equipment. One challenge, however, is that the lack of
efficient explainability that comes with the use of artificial intelligence in in-
novations such as Advanced Driver Assistance Systems, could raise
challenges for liability attribution.
Digitalisation also makes insurance processes more efficient. For
instance, digital data enables more holistic underwriting based on A long term play
more granular data derived from different sources (eg, wearables).
It is enabling significant operational efficiencies, such as a 3-8 per-
centage point reduction in loss ratios that this sigma finds insurers Digital transformation remains high on the industry agenda. The
are targeting in underwriting processes. The report also says that initial focus of investment was on digital distribution channels,
digital technology could generate savings of 10-20% in other areas/ but attention has since moved to other parts of the insurance val-
processes of the value chain. ue chain, including in pricing and underwriting processes. All said,
Mitigating risks the further transformation of the industry through digitalisation
will be a longer-term play. For starters, at the macro level, going
New technologies also can be used to improve risk mitigation pro- digital requires the building and operating of various infrastructure
cesses. The increased use of data and data analytics, in particular assets. And for insurers themselves, successful implementation of
of sensor technologies and the networking of factories, buildings, digital technology is dependent on data availability, interpretability
machines and other physical objects can reduce the frequency and requirements and system complexity. To this end, insurers will need
severity of accidents, for example with smart home ap- to re-engineer workflow processes and, crucially, invest in data en-
plications and the adoption of sensors in gineering.