How big data is reshaping the life-settlement industry
by Wm. Scott PageMr. Page is CEO of policyappraisal.com, a leading expert in life insurance valuation and settlements. He has been published in Forbes, Huffington Post and is a regular contributor to our publications.
The insurance industry has been no stranger to Artificial Intelligence (AI) in recent years. Its potential impact on the sector has been a focal point of numerous discussions, often tied to big data, which has played a crucial role in insurance for decades, given the enormous volume of data generated and managed daily. From actuarial tables to health and lifestyle information, the industry is inundated with data, making it unsurprising that the life insurance settlement industry is now closely examining the AI revolution.
The Creation And Utilization Of Artificial Intelligence
AI’s development primarily relies on meticulous data analysis and the identification of behavioral patterns. AI’s intelligent decisions are driven by data, bridging the gap between raw information and actionable insights. The advent of GPT (Generative Pre-trained Transformer), a writing AI program, has further underscored the power and potential of AI, simplifying previously complex processes.
AI is designed to handle tasks that are too challenging, repetitive, or costly for human intervention. Its potential impact on the insurance industry extends to risk assessment, fraud detection, human error reduction, claim processing, and customer service enhancement. Currently managed by humans and computers, these areas are poised for significant advancement through AI.
Unlocking AI’s Potential In Insurance
AI’s transformative capabilities extend to reshaping insurance underwriting, pricing, and selling. As AI gathers and analyzes more data over time, it will surpass human capabilities in conducting research and gathering information.
For instance, consider a situation where an individual seeking a life insurance policy enjoys skydiving but chooses not to disclose it on their application to avoid policy denial or high premiums. An AI program could analyze the applicant’s social media feeds and uncover evidence of their skydiving activities, a task currently impractical for humans due to time constraints.
AI can also contribute to more accurate life expectancy data in the life insurance settlement industry. Currently, physicians review medical records to estimate life expectancies. With AI, more data points can be gathered and analyzed from an applicant, resulting in more precise predictions based on current healthcare trends.
Preparing For The AI Transformation
At PolicyAppraisal.com, we are proactively preparing for this AI transformation. We have developed proprietary algorithms that analyze the value of policies on the secondary market. Through reviewing thousands of policies, we continuously monitor the performance and overall accuracy of life expectancies. Policy appraisals are evolving, with values fluctuating month to month and year to year.
With AI’s assistance and access to more data, we anticipate even more accurate life expectancies and appraisals in the future. These values might fluctuate more frequently, reflecting real-time insights and adjustments made possible by AI.
Setting The Initial Benchmarks
Accurate initial benchmarks are vital when dealing with AI and data analysis. Establishing meaningful reference points is crucial for insightful analysis. As AI continues to revolutionize the insurance industry, the challenge lies in setting accurate initial benchmarks. Regular policy appraisals can help address this challenge, advancing the industry and enabling agents and advisors to set benchmarks for future policy valuations. Embracing AI, the insurance industry will witness a revolution that blends traditional practices with forward-looking technology, reshaping how we approach life insurance settlements.