Monday, December 5, 2022
Data analysis software has soared to new heights in the insurance sector, in combination with Artificial Intelligence, which has enabled a new accuracy of predictions about things like weather, natural disasters, and likelihood of senile dementia.
Mikio Okumura, the president of Sompo Holdings, discussed how data analysis has become increasingly accurate in a way that previously “only God knew about.” Sompo Holdings is currently working on Japan’s first dementia prevention insurance package, which is able to analyze the heartbeats, appetite, and sleeping patterns of nursing home residents.
Japan has the world’s fastest-aging society and one of the highest life expectancies, thus seeing a growing national dementia problem. This new type of insurance plan would only pay out when dementia symptoms occur, and in the meantime, attempt to delay the onset of the disease by incentivizing consumers to change their daily behaviors. If consumers change their habits and are able to delay symptoms of dementia by even two or three years, they can access cheaper insurance.
Sompo, along with many other insurance companies, is hopeful that using AI will help their mitigate risks for customers, not only in the healthcare sector, but in other products such as catastrophic event insurance. AI is able to predict the type of damage that will be occur when natural disaster hits, such as a hurricane, and can help encourage customers to make structural changes to prevent major economic loss.
For more information see Eri Sugiura and Leo Lewis “AI is giving insurers godlike powers, says Sompo chief”, The Financial Times, November 13, 2022.
Special thanks to Joel C. Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.