Artificial Intelligence: Thanks To AI, Insurers Now Have SuperNormal Powers, Says Sompo Chief
Using AI and data analysis, insurers can now make predictions that “only god knew about.”
These prophetic forewarnings range from the weather, natural calamities, and even senile dementia, according to Mikio Okumura, chief of Japanese insurer Sompo Holdings (TYO: 8630). The forward-looking company invested $500mn investment two years ago in Palantir (NYSE: PLTR), the US specialist in big data analysis. It also has bought a stake in Abeja, a Japanese AI start-up. (Financial Times)
All that focus on AI is now paying off for Sompo. The company plans soon to launch Japan’s first dementia prevention insurance package. It is able to take a shrewd call on the risk-reward of the new product because it could analyze data on the heartbeats, appetite and sleeping patterns of thousands of Japanese nursing home residents.
The Japanese are susceptible to dementia because they are the world’s oldest society, with the largest cohorts of over 65s. Indeed, dementia is now a national problem.
According to Okumura, insurers need to play “god” if they have to survive the competitive battle in the industry, and technology is a surefire way to gain an advantage when they pivot out of conventional business models and practices.
“We can now reveal things that, in the past, only god knew about, thanks to technology including AI,” Okumura says.
Sompo’s dementia product plays a two-pronged role in the battle against the dreaded disease. One, it incentivizes customers to ward off or delay it through positive actions such as improving their sleep, diet and exercise. Secondly, if dementia symptoms do occur, Sompo pays out on the insurance as per its terms.
“We will encourage our customers to change behaviour and such a solution could be attached to the medical insurance of people who are still at their working age,” Okumura says. “If they manage to delay symptoms of dementia [for two or three years], we can offer them cheaper insurance.”
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