Regulatory variables in the accelerating industry
Bateson has spent 40 years in the insurance industry. When he started underwriting, technology was essentially absent from the desk. Now, underwriters have access to vast amounts of third-party data and unstructured information that would have been unimaginable at the beginning of their careers. He hopes that the continued development of computing power and major technology platforms will further accelerate the pace.
“Growth, especially in the last five to ten years, has accelerated dramatically,” he said. “I think this will be the norm going forward.”
They argue that insurance is particularly positioned to benefit from these advances given the volume and variety of unstructured data flowing through the underwriting and claims processes. But he identifies one important variable: regulators.
Each state maintains its own insurance department that has authority over how carriers operate. Bateson expects regulatory scrutiny of AI to intensify, particularly around bias in decision making and whether automated systems can be trusted to work without human oversight.
“Depending on how regulators view things, that could slow things down, or it could create a need to keep a human in the loop compared to a straight agent process where the system is completely making the decisions,” he said. “That regulatory piece could have a real impact.”