Artificial Intelligence: Implications for Social Inflation and Insurance

Abstract Artificial intelligence (AI) has the ability to enhance the insurance industry's value chain by altering relationships, reinventing business platforms, and expanding hidden data. Insurance companies will apply AI to greatly enhance large data analytics, evolve algorithms with transactional data faster, and combine data in new ways to discover better underwriting risks and appropriately price the risk of various insureds based on the true value of their business risks. This article explores how AI will have a significant impact on the workforce, jobs, and furthermore how the elimination of jobs will potentially exacerbate social equality gaps on a global scale, leading to a shift in culture and increased social inflation, thus impacting the insurance industry as well as its customers.