Artificial intelligence (AI) in the insurance sector is crucial to creating affluence in the African region and the globe. It can help reduce pressure on the country’s governments to provide communal goods such as annuities by giving the correct data needed by the government officials, most especially for the developing countries. It can also inspire trade and free enterprise, alleviating risks and high divergence; and improving communal living standards.
25% of the insurance industry will be automated in 2025 thanks to AI and machine learning techniques.Mckinsey
Compared to other developed countries, by 2030, Africa will reduce the ranks of its extremely poor by 45 million, and relative poverty will decline from 33.5%to 24% when compared with other developed countries.
Artificial intelligence would help deal with recent natural disasters like drought in Somalia, economic interruptions like post elections in Kenya in 2007, and epidemics like Ebola in Congo. Artificial intelligence will thereby upsurge the demand and growth in digital insurance platforms by offering solutions to most impending problems that seem prone to most African countries.
The insurance sector comprises three segments which are re-insurance, non-life insurance, and life insurance. In each product, most African countries have improved tremendously but in distinct percentages. South Africa has been the leading country with about 70%. The rest is Morocco, Kenya, Egypt, and lastly, Nigeria.
Artificial Intelligence will improve Insurance offerings and innovations
Artificial intelligence can help boost the life insurance sector by offering security and the right premiums to the beneficiaries. This sector has significantly dropped in recent years, with only five nations comprising 92%, South Africa, Morocco, Nigeria, Kenya, and Egypt.
With the COVID-19 pandemic, the life insurance sector could improve since more opportunities for the premium would be available for most beneficiaries. More organizations will open opportunities for people to cover their loved ones and their businesses from future pandemics. Additionally, the increase in the middle class can help more people appreciate the value of life insurance in these developing countries and the globe.
Increase of digital platforms
Because, with an increase in online platforms opportunities, more are becoming financially stable, filling the gap of insurance covers, especially health insurance due to their lifestyles. With artificial intelligence, they can be comfortable spending their disposable income on life insurance.
According to a recent study by Young and Ernst 2016, an upsurge in earnings is the most significant factor in growth in insurance premiums. They can enjoy better household steadiness because of life insurance for their loved ones. Artificial intelligence offers prospects in the form of amalgamation. Unproductive and unsanctioned organizations will be forced out of the market giving reputable companies opportunities for vigorous competition and improvement for improved coverage.
Artificial intelligence is digitizing native insurance companies. Opening doors for many accessible insurance companies in nations where the premiums have not been fully exploited; will help improve the number of countries that appreciate the insurance premiums and have remedies for natural disasters for countries that do not have the proper governance and funds.