Are insurers changing the world?

Artificial Intelligence (2)
Artificial Intelligence (AI) is a hot topic in the insurance sector. There has been widespread debate and speculation about how advanced algorithms can revolutionise underwriting and claims handling – see our previous post on this topic.

Against that background, it is interesting to see insurers exploring the use of AI in loss prevention. Direct Line, the UK based motor and personal lines insurer, is behind an initiative to develop ‘Smart Crossings’. Direct Line says that one in four pedestrian accidents take place at a crossings and this new initiative is designed to counter that. The prototype ‘Smart Crossing’ can differentiate between vehicles, pedestrians and cyclists automatically by using cameras and a machine learning system combined with a specially designed road to create a ‘living crossing’. The crossing has the ability to widen, narrow, appear and disappear in response to demand and can change colour and highlight particular areas as required. For example, the crossing will adapt to large or small groups of pedestrians and cyclists will also be given extra warnings if there are pedestrians they might not be able to see. The crossing also has an emergency setting, turning red if, for example, a child runs into the road.

This is the second such initiative from Direct Line, the first being a proposal for drones to light remote areas in response to a person’s movement in order to increase safety for people walking at night.

It remains to be seen if and when these initiatives will be rolled out more widely but they are striking examples of insurers looking for ways to exploit AI outside the office environment. It also raises the issue of whether or not insurers themselves are assuming a legal liability for these products and may themselves face claims in the event that they fail to operate as intended. No doubt this has been considered in the cost benefit analysis which will have to be conducted in relation to these products. In any event, the march of AI into the insurance sector seems unstoppable.

Simon Cooper