Machine Learning being used by over half of top insurers globally, new research shows
Posted: 1 June 2017 | By Darcie Thompson-Fields
More than half of insurance firms around the world have implemented machine learning technology into their business.
The claim comes from Earnix, a leading provider of analytics solutions for the financial services industry, who announced the results of a global survey of more 193 insurance executives today (May 31).
Earnix said the survey shows wide adoption of Machine Learning (ML) across the globe, and the expectation that ML will bring “significant” change to the industry over the next 3-5 years.
Results revealed that over half (54%) of the executives surveyed said that their organisation was using Machine Learning for predictive analytical modelling. Of those deploying the technology, 70% said they were using it for risk modelling, followed by demand models (45%) and fraud detection (36%).
Over half of the respondents (57%) said that Machine Learning has made their analytical models far more accurate, which has led to better risk assessments and ultimately better decision.
Earnix CEO Udi Ziv said: “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. Earnix was an early adopter of this technology and is working with its clients to integrate it into their analytics, enabling them to automate more of their processes and predict outcomes more accurately. The combination of advanced analytics with Machine Learning is truly an innovation with direct and measurable benefits.”
However, the survey found that the main barrier to wider adoption is a lack of knowledge and expertise within organisations. Eighty-two per cent say their organisation is relatively inexperienced with Machine Learning.
46% of respondents said a knowledge gap was preventing them from achieving the full potential of the technology, whilst only 4% of companies reporting they have staff that they would consider to be experts in the field of Machine Learning.
The knowledge gap is not the only challenge facing companies, with 20% also reporting a lack of trust in the methodology is a major barrier to adoption.
Earnix Principal Consultant Drew Lawyer insists however these are problems that will resolve themselves in time.
“Fortunately, these barriers are just short-term,” said Lawyer. “Like with any new technology and methodology, it takes time to build both the internal competencies to execute and the business buy in. Machine Learning is positioned to have a significant impact on the way insurers do business as cited by 71% of carriers.”
The survey report, named “Machine Learning – Growing, Promising, Challenging,” is available on the Earnix website and can be downloaded at no charge here: http://bit.ly/EarnixMachineLearningPR17