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Insurance underwriting is essentially a data-driven practice. In an increasingly interconnected world that produces far more data than a single person can process, computers and artificial intelligence have come to the rescue in data analysis and decision making. Quantum computing could change how the insurance industry uses data for underwriting and more.
While the full potential of quantum computing is still a few years away, insurance companies need to be serious about the future of quantum computing in their strategies today. The cloud is the foundation for the successful application of quantum computing. Carriers need to strengthen cloud adoption and optimize how they use the cloud for data collection in preparation for using quantum computing to move forward.
Why Insurance Companies Should Consider the Power of Quantum Computing
Accenture has been tracking a number of quantum computing innovations over the past few years. Findings from our latest 2022 Technology Vision Report show that we are entering a new era of digital transformation where innovation and economic success will depend on unprecedented computing power.
Quantum computing allows us to solve problems that are too complex for classical computers. In this context, complexity refers to an almost unimaginably large number of variables interacting in complex ways. To take an example from the report, in logistics, one trip with 16 stops has 20 trillion possible routes. A classical computer must use every opportunity to find the most efficient route, which would take even the fastest computers decades to complete.
As innovation in quantum computing becomes commercially viable—not just possible in academia—working with massive datasets will become achievable for the average enterprise.
Accenture predicts that 80% of workloads will run in the cloud over the next few years. This means more opportunities to collect data generated by workflows and behavior in the digital world. With the power of quantum computing, companies will be able to extract valuable insights from this ever-growing volume of data to add value to their businesses.
To quote Technology Vision: “Companies should look for opportunities in the free space, where more specialized or more powerful computing can have a broad impact on their industry.” Insurers who are taking the lead in increasing their computing resources can benefit as we move into a world of augmented reality, IoT wearables and computer vision – a world where data collection is easier than ever and The volume and complexity of data only continues to grow. . increase.
Full use of data
Quantum computing is an extension of the cloud and can make what we already do in the cloud more valuable. In one of my recent posts, I talked a bit about how wearables and IoT technology will provide underwriters with even more data through the cloud. Currently, AI supports underwriters in the process of gathering, analyzing and making sense of most of the data available to them. But as the amount of data on individual customers continues to grow, quantum computing could help insurers find bigger patterns and make more accurate predictions about where the market is heading.
Quantum computing could also help insurers assess risk on a much larger scale. Risk assessment, at its core, is how likely it is that something will go wrong. In the insurance industry, quantum computing has the potential to completely change the underwriting process. Quantum computing is already being used for risk assessment in the financial industry to predict sales and behavior in financial markets by Goldman Sachs (in partnership with quantum computing companies IonQ and QC Ware). Just as a quantum computer can quickly determine the most efficient delivery routes out of 20 trillion options, it can also determine the likelihood of a person having a car accident at a particular intersection.
An important application of quantum computing is predictive modeling of the risks associated with the effects of climate change. Quantum computing can handle complex cross-cutting factors that contribute to risk assessments associated with natural events such as wildfires and tornadoes. Unprecedented natural disasters are likely to continue to affect our property and health, and quantum computing can reduce the unknown to help carriers understand what the future may bring. With improved scenario modeling capabilities, underwriters can more accurately deliver the coverage customers need and drive revenue growth even as our environment becomes increasingly volatile.
As we move closer to a world where quantum computing is part of every enterprise’s strategy, today’s insurance companies need to assess their current technical debt. Change comes quickly. Once key advances in quantum computing are revealed, the gap between early adopters and laggards will widen rapidly.
First steps towards quantum computing
One of the main obstacles described in the Technology Vision is the widening gap between technological innovation and the skills required to work with this technology. Leaders in every industry must think about how they will train and hire the talent they will need to run the organizations of the future, including quantum computing. A study cited in the British journal Technology Vision found that there is a severe shortage of big computing professionals. Insurers can create demand for these positions to incentivize applicants and focus on upskilling existing employees.
Insurers also need to consider whether they have the right decision makers. Do you currently have people on your team who can think through emerging issues and opportunities to form effective coping strategies? It is essential to have a diverse active planning team. The use of different points of view and background will lead to a more subtle and holistic solution to the problem.
In addition to attracting the right people to support quantum computing initiatives, building partnerships will help leaders achieve scalable results at a more reasonable cost in terms of human, technology and financial resources. The Technology Vision report recommends joining a consortium that will advance quantum computing in the industry.
In healthcare, a consortium of NVIDIA, AstraZeneca and GlaxoSmithKline (GSK) around Cambridge-1, the UK’s most powerful supercomputer, has led to a generative AI model for chemical structures. The use of predictive modeling has helped bring new drugs to market much faster than before.
Insurance leaders are gradually joining the arms race for quantum supremacy. The German multinational reinsurance company Munich Re is a founding member of the national consortium for quantum technologies and applications. In the US, the Quantum Economic Development Consortium (QED-C) is one of the largest consortiums working on quantum innovation, and currently includes companies such as AT&T, Wells Fargo, Boeing, and Honeywell. There are many opportunities for insurers to be the first in the industry to get involved in quantum computing research and development.
From Cloud to Quantum
Quantum computing will change how we use data, exponentially increasing the value of the data already collected in the cloud. The digital world will only become more intertwined with physical reality. The amount of valuable data organizations will have access to will also continue to grow as we innovate in the human experience. To take full advantage of this explosion of data, insurance companies need to take quantum computing seriously as part of their overall cloud computing and data strategy.
I would like to discuss how to maximize your cloud strategy for the future of quantum computing. Please contact me.
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