How Artificial Intelligence will change the market of insurance companies in particular the automotive sector

1. The Concept Of Artificial Intelligence
Artificial intelligence is software that demonstrates the ability to implement analysis, decision making and learning, similar to the abilities of a person. It is also an area of ​​informatics that studies intellectual objects not only from an engineering point of view but also from a philosophical and psychological point of view2. This philosophical view is especially important in analyzing the risks of a society in which human and artificial intelligence coexist.
The term “artificial intelligence” was coined in 1956, but it took almost 25 years for the light to see the first commercial technology with an intelligent agent that helped configure orders for new computer systems at Digital Equipment Corporation3. Today, artificial intelligence finds application in virtually every industry, and it is expected that by 2035 it will increase the profitability of corporations in 16 industries in 12 countries by an average of 38%4.
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2. The Impact Of New Emerging Risks
The potential impact of artificial intelligence on the insurance industry has two components. Its application will help improve the insurance process in a number of aspects, which will benefit the client. In addition, it will have a destructive effect, causing new risks. However, to protect companies and consumers, they can be transferred through the development of new insurance products (especially in the areas of liability insurance, medical insurance, and life insurance).
According to a recent survey among CEOs of global corporations, 67% of them believe that artificial intelligence and automation will have a negative effect on the confidence of stakeholders in their industry in the next five years7.
Artificial intelligence puts business at risk, which can easily counterbalance the colossal benefits of such a revolutionary technology.
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3. Autonomous Cars And Their Impact On The Field Of Insurance
It is expected that autonomous robots-cars will become in the future the most influential technology based on artificial intelligence. According to forecasts, by 2030 the share of penetration of autonomous robotic cars will reach 5%, and the cumulative annual sales growth in the period from 2025 to 2035 will be about 40%14. Given the impending market turmoil, the automotive and insurance industries are making maximum efforts to identify potential risks and opportunities.
Autonomous robots-cars will increase the safety of traffic, eliminating the human factor, which is the main cause of road traffic accidents. According to forecasts, artificial intelligence will reduce the number of accidents by 90%, and CO2 emissions – by 60% 15.
The monetary benefits generated by saving on avoiding accidents, reducing travel time, efficient fuel use and compensation for parking are estimated at $ 2,000 to $ 4,000 per year for each car16.
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