On December 18th, 2023, we were featured in this article in Het Financieele Dagblad with an extensive interview where we somewhat debunked the ‘AI hype’ and focused particularly on the ethical aspects of AI.

THE ®EVOLUTION OF AI IN THE INSURANCE SECTOR

Introduction: It is remarkable that many still think AI is limited to generative AI, such as Chat-GPT. However, specific AI has been used in the insurance sector for some time, particularly by major insurers for premium and risk optimization. The data science company Onesurance focuses on specific AI to support financial service providers in better serving their customers.

Dennie Van Den Biggelaar, econometrician and data scientist with 12 years of experience as an AI strategist, emphasizes that in the insurance sector, it is more about an ‘evolution of specific AI’ rather than a ‘revolution of generative AI’. This (r)evolution is driven by a growing need to serve customers in a scalable and personal manner. Due to consolidations, portfolios are increasing in size with a growing shortage of advisors. Insurance companies are thus reaching the limits of their growth. “This problem can only be solved by using data and AI more intelligently,” says Van Den Biggelaar, who, along with his partner Jack Vos, founded Onesurance. Vos, who is well-acquainted with the insurance world, explains that their AI modules are not intended to replace advisors and experts but to support them in their work. “In the world of insurance, mortgages, and pensions, it ultimately revolves around trust: it is and remains a people business.”

Onesurance consciously chooses to deploy specific AI to solve very specific problems for insurance companies. Based on historical data, reliable predictions are made for acceptance, risk of termination, customer lifetime value, or effective customer management, ensuring that the right customer receives the right attention at the right time. “Our AI modules are ‘by design’ explainable, transparent, and comply with the Ethical Data Frameworks of the Dutch Association of Insurers,” notes Van den Biggelaar, who is responsible for the technical development of the AI modules. Vos adds, “These are qualities typically required in the insurance industry, but which generative AI cannot yet provide.”

The potential to do more with data and AI is considerable. According to a study by the CapGemini Research Institute among 204 insurers, ‘data masters’ in the insurance sector achieve a revenue per FTE that is 175% higher and are 63% more profitable. This fact obviously appeals to parties that are constantly making acquisitions in their ambition to grow scalably.

At the same time, the dilemmas around privacy, bias, and liability remain significant. If AI is deployed without context and without the so-called ‘human in the loop,’ unintended errors can occur, leading to customer dissatisfaction, ethical issues, and a loss of trust in the insurance sector. “You must not make ethical and moral compromises when working with machine learning and AI,” says Van den Biggelaar. “It is crucial that AI experts feel responsible for steering this in the right direction. And we take our role in this very seriously.” Therefore, Onesurance collaborates intensively with Brush-AI, the first Dutch company dedicated to systematically managing the ethical component in AI.

That this responsibility is also taken seriously by the insurance sector is evident from the KOAT advisory committee, which started under the leadership of SIVI in 2019. SIVI develops and manages standards for digital business in the financial world. Jack Vos, who is himself on the committee, says: “KOAT stands for Quality Unmanned Advice and Transaction Applications. By ‘unmanned applications,’ we mean smart software capable of replacing tasks, not people. The increasing use of such automated applications in the financial sector, combined with new (European) regulations, makes quality control of unmanned applications increasingly important to safeguard customer interests.” The Financial Services Complaints Institute (Kifid) sees more and more complaints about digital services. The SIVI platform offers insurers, underwriting agents, and software companies a checklist and a knowledge base, among other things. It is not unthinkable that the checklist is a good first step towards a quality standard. This is important for the end consumer but also for the financial advisor themselves. After all, the financial service provider remains liable for the advice given, even if the unmanned application is developed by an external software supplier.

“A technology becomes powerful only when it is embedded in the ethical and human context.” Satya Nadella, CEO of Microsoft.

Fact Box: Since September 2022, Onesurance has been part of the Cronos Group, the largest ICT service provider in Belgium, with 10,000 employees, 500 of whom are based in the Netherlands. This has enabled Onesurance to scale quickly, as all complementary ICT experts are directly available within the Cronos units. Founders Jack Vos and Dennie van den Biggelaar have gained years of experience in successfully developing and implementing data science solutions at Building Blocks, which is part of the listed company CM.com. In 2019, they won the NVGA Innovation Award with the Data Driven Underwriting solution. Onesurance has offices in Amsterdam-IJburg, Breda, and Kontich (Belgium).

We concluded by emphasizing the importance of the Advisory Committee KOAT of SIVI, which includes representatives from the Dutch Association of Insurers, Adfiz, the Contact Group Automation Foundation, Leiden University, and Tilburg University.

KOAT stands for Quality Unmanned Advice Applications. This refers to smart software that can replace tasks, but not people. Insurance is and will remain a people business.