AI Success: Can Be Achieved Thru Data Standardization In The Insurance Industry
Currently, the market is increasingly using a wide range of AI and other procedures and technologies to do business. As a result, things like distributed ledgers and smart contracts are allowing increasing levels of immutability, consensus/agreement, and cryptography/security.
Standardized data would allow it to be sent more fluidly. The shipping industry is a prime example of this. Before containerization goods were unloaded from ships in a wide range of containers and crates. Standard containers allowed goods to be delivered in a more organized and structured manner — and the same has to be done with data in the insurance industry.
The future of AI in the insurance industry is all about the data. For instance, smart contracts are evolving so that if a certain event happens the contract will automatically be triggered to self-execute. Such contracts may also tap into databases and information from the internet of things to enhance any processes being run.
The distributed ledger allows data to be moved about efficiently and securely. Data is the food the insurance industry needs, but it has to be standardized and regulated.
The advantages to this are that standardization reduces transaction costs and in addition, information can be shared and trusted. This creates applications beyond insurance to banking and other finance.
We can describe this as creating a new stack — or a pyramid of levels that has data at the bottom, along with standardization, integration, automation. The next level is made up of smart contracts and distributed ledger, and then AI is on the top of the pyramid.
However, this is still a developing area — the future could be different and market participants will need to watch closely.