AI to the rescue
AI will likely be a promising ally in the insurance industry's efforts to tackle climate change and narrow the protection gap. The technology has the potential to offer benefits to all parties involved, from an easier and quicker claims process for customers to insurers predicting and preventing claims – protecting customers, the economy, and their balance sheets.
And for those who are uninsured or under-insured, the reduced transaction costs of automated technology mean that AI has the power to make insurance more affordable and easier to use.
AI technology is already proving revolutionary in the fight against climate change. Japan is using AI to analyze satellite images of the earth to predict future natural disasters, while NASA and data analysis firm Development Seed recently tracked the path of Hurricane Harvey in the United States six times more accurately than traditional monitoring, helping authorities to prepare in advance.
In the future, insurance companies have an opportunity to become eternal protectors, playing an increasingly proactive role in helping communities better prepare for climate change. These will range from using data to help nudge societies away from poor planning decisions such as overbuilding in high-risk coastal flood zones to encouraging authorities toward better choices such as building more resilient infrastructure designed to mitigate rising sea levels.
AI has the power to significantly reduce headaches for customers who are victims of climate-change-related disasters by tracking and warning customers before an incident occurs. This is something insurance company Hippo already offers. The firm uses smart home sensors and internet of things (IoT) technology to identify and predict damage before it occurs, mitigating the impact of events. After an event, its AI technology enables faster, more accurate, and more seamless claims processing, allowing customers to begin the recovery process more quickly.