Insurance underwriting is fundamentally a data-driven practice. With an increasingly connected world producing far more data than a single human can process, computers and AI have stepped in to support data analysis and decision making. Quantum computing has the potential to change the way the insurance industry uses data in underwriting and beyond.
While we are still several years away from realizing the full capabilities of quantum computing, insurers need to take the future of quantum seriously for their current strategies. The cloud is the basis for a successful application of quantum computing. Operators need to strengthen the cloud and optimize how they leverage the cloud to collect data in preparation for using quantum computing moving forward.
Why insurance companies should care about the possibilities of quantum computing
In recent years, Accenture has been tracing the line of innovation in quantum computing. Insights from our latest 2022 Technology Vision report show that we are entering a new era of digital transformation where innovation – and economic success – will be driven by 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 high volume of variables that interact in complicated ways. To use an example from the report: In logistics, a single trip with 16 stops has 20 trillion possible routes. A classical computer would have to go through every single possibility to find the most efficient path, which would take even the fastest computers decades to figure out.
As innovations in quantum computing become commercially viable—not just possible in an academic setting—it will be possible for the average company to work with massive amounts of data.
Accenture predicts that 80% of workloads will be in the cloud in the next few years. This means more opportunities to collect data produced by workflows and behaviors that occur in the digital world. With quantum computing capabilities, companies will be able to extract insights from this ever-increasing amount of data to create value in their business.
To quote Technology Vision, “Companies should be looking for those white space opportunities where more specialized or more powerful computing can impact their industry at large.” Insurance companies that take the lead in increasing their computing resources may have an advantage as we enter a world of augmented reality, IoT wearables and computer vision – a world where data capture is easier than ever and the volume and complexity of data only continues to increase.
Uses data to its full potential
Quantum computing is an extension of the cloud and can make what we already do in the cloud more valuable. In one of my last posts, I talked a bit about how wearables and IoT technology will bring even more data to underwriters via the cloud. Currently, AI supports insurers through the process of collecting, analyzing and understanding much of the data available to them. But as data about individual customers continues to multiply, quantum computing can help insurers find larger patterns and make better predictions about where the market is headed.
Quantum computing can also help insurers assess risk on a much larger scale. Risk assessment, basically, is figuring out how likely things are to go wrong. In the insurance industry, quantum computing could completely reshape the underwriting process. Quantum computing is already used for risk assessment in the financial industry for sales forecasting and financial market behavior by Goldman Sachs (in collaboration with quantum computing companies, IonQ and QC Ware). In the same way that a quantum computer could quickly determine the most efficient shipping routes out of 20 trillion options, it can also determine the probability of an individual getting into a car accident at a particular intersection.
An important application of quantum computing is predictive risk modeling around the effects of climate change. Quantum computing can handle the complex intersecting factors that help assess risks associated with environmental events such as wildfires and tornadoes. Unprecedented natural disasters will likely continue to affect our properties and health, and quantum computing can reduce unknowns to help carriers understand what the future holds. With improved scenario modeling capabilities, insurers can more accurately provide the coverage customers need while driving revenue growth, even as our climate becomes more volatile.
As we approach a world where quantum computing is part of every corporate strategy, today’s insurers must assess their current technological debt. Change is coming quickly. As key achievements in quantum computing are unlocked, the gap between early adopters and laggards will widen rapidly.
Taking the first steps towards quantum computing enablement
One of the major obstacles described in the Technology Vision is the growing gap between technological innovation and the skills required to use that technology. Leaders in all industries must think about how to train and hire the talent they need to run the organizations of the future, which includes quantum computing. A study cited in Technology Vision from the UK found that there was a critical shortage of large scale data professionals. Insurance companies can create demand for these roles to stimulate job seekers and focus on upskilling current employees.
Insurers also need to consider whether they have the right decision makers on the premises. Do you currently have individuals on your team who are capable of thinking through upcoming challenges and opportunities to shape strong strategies to deal with disruption? Having a diverse team that addresses proactive planning is critical. Bringing a range of perspectives and backgrounds to the table will result in more nuanced and holistic problem solving.
In addition to bringing in the right talent to support initiatives related to quantum computing, partnerships will help leaders achieve scalable results at more reasonable cost – in terms of human, technical and financial resources. The Technology Vision report recommends joining a consortium that facilitates quantum computing capabilities across the industry.
In healthcare, a consortium between NVIDIA, AstraZeneca and GlaxoSmithKline (GSK) around Cambridge-1, the UK’s most powerful supercomputer, has resulted in a generative AI model for chemical structures. It has helped bring new drugs to market much faster than before by using predictive modeling.
Insurance leaders are slowly joining the arms race for quantum supremacy. The German multinational reinsurance company Munich Re is one of the founders of the country’s Quantum Technology & Application Consortium. In the US, the Quantum Economic Development Consortium (QED-C) is one of the primary consortia working on quantum innovation, and members currently include companies such as AT&T, Wells Fargo, Boeing and Honeywell. There are plenty of opportunities for insurance companies to be the first in the industry to participate in quantum computing research and development.
From cloud to quantum
Quantum computing will change the way we use data and add exponential value to the data already collected through cloud-based technologies. The digital world will only become more intertwined with physical reality. The volume of valuable data that organizations will have access to will also continue to increase as we innovate on the human experience. To take full advantage of this explosion of data, insurers must take quantum computing seriously as part of their overall cloud and data strategy.
I’d be happy to discuss how to maximize your cloud strategy for a quantum computing future. Please contact me.