Insurers’ sustainability seen in metaverse, gen AI, QC adoption

By Cynthia Ezekwe

Insurance experts  have urged insurance companies to leverage on  generative AI, the metaverse and quantum computing technologies and make the most of it, so as not to be left behind by competition as  technological transformation advances.

The experts made the call during a panel discussion held recently by Generali global, an insurance and asset management giant, in partnership with FinTech Global, the world’s leading provider of fintech information services, to discuss how the metaverse, quantum computing and generative AI are disrupting insurance and how the technology will evolve in the coming years.

The panel was moderated by Emanuele Colonnella, innovation activation lead at Generali; other members of the panel were  Apu Mitra, tech innovation strategy associate  director at Accenture, a global professional services company that specialises in information and technology services and consulting; Philip Lobatto, director financial services at Microsoft;  Artur Niemczewski, non-executive director at Chartered Insurance Institute,  and Romeo Radanyi, director of quantum architecture at Moody’s.

Apu Mitra, observed that organisations are innovating faster and the technology change is going through a paradigm shift, which is transforming how contents are created, as well as how humans interact and communicate globally.

Mitra explained that the  convergence of quantum, generative AI and the metaverse, which are three big technologies, are going to evolve and revolutionise the way humans interact with each other, and the global environment, adding that businesses that establish a foundation and learn in the market early are best positioned to take advantage of emerging opportunities.

Speaking on the metaverse which is a 3D enabled digital space that leverages virtual reality and augmented reality to create an online version of the world where people can interact with one another, Mitra stated that the metaverse is a great environment to build, test and explore business models in a 3D equivalent of the real world.

“The metaverse  will bring a plethora of applications for insurers and brokers. For example, loss adjusters could feed real-time risk information using a digital twin to alert insurers with images or videos from live claims into simulations powered by AI and quantum computing to create a 360-degree view of claims, and test and tweak loss scenarios remotely,’’ he explained.

Another potential use case, Mitra outlined, was for insurers and brokers to model risks in 3D to help insureds mitigate losses and underwriters can simulate physical risks and scenarios to improve risk pricing and selection.

He further added that the responsible use of these convergence technologies could  change the workplace and help employers offer a better recruitment, employment on boarding experience and creating virtual workspace to overcome some of the challenges of hybrid working, bringing people together from anywhere across the world, building organisational culture and enhancing learning.

The panelists agreed that quantum computing, which is an evolving technology space that utilises the laws of quantum mechanics to help solve problems that are too complex for traditional computers, could be utilised in the context of insurance, to assess a high volume of variables and data to improve risk calculations, stating that insurance firms  can leverage the capabilities of a quantum computer through the cloud to handle complex calculations for underwriting purposes.

However, Romeo Radanyi emphasised that quantum computing is also a double-edged sword, explaining that while it has the potential to revolutionise various industries, insurance included, it also poses risks, particularly in the realm of cryptography and data security.

According to Radanyi, Shor’s algorithm, a quantum algorithm developed by Peter Shor in 1994, is a prime example of this dual nature. He noted that this process can efficiently factor large numbers, which has significant implications for cryptography and ultimately for cyber risk insurance since many widely used cryptographic schemes, such as Retirement Savings Account (RSA), rely on factoring large numbers to ensure data security.

“Classical computers struggle to factor large numbers in a reasonable time frame, making these encryption methods secure. However, with Shor’s algorithm, a sufficiently large quantum computer could factor these large numbers quickly, thereby breaking the encryption and compromising data security,” he said.

The panelists averred  that of the three technologies discussed , generative AI has received the most attention recently, noting that it attracted over 57 million users within its first month, and current estimates put daily users at 13 million.

The panel noted that generative AI technology can help firms to automate the writing of emails,generate content for presentations, and transform various other workflows. They also agreed that generative AI will transform how industries work, adding that  firms need to see how they can take advantage of the technology, or they could be left behind.

The industry experts called on insurance firms to take  time to examine the metaverse, generative AI and quantum computing and understand  how the technology could be leveraged to get a competitive advantage.

In this context, they emphasised that there is no point waiting to see how others are going to leverage the technology as it will already be too late, while urging insurance firms to  focus on internal operations, and explore how the technology can reduce manual workloads or evolve processes.