Insurance underwriting is fundamentally a data-driven practice. With an increasingly interconnected world producing far more data than an individual human can process, computers and AI have come 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’re still several years away from realizing the full capabilities of quantum computing, insurers need to take the future of quantum seriously for their present-day strategies. The cloud is the foundation for the successful application of quantum computing. Carriers need to strengthen cloud adoption and optimize the way they leverage the cloud to collect data in preparation for using quantum computing to get ahead.
Why insurers should care about the possibilities of quantum computing
Over the last several years, Accenture has been tracing the line of quantum computing innovation. Insights from our most recent 2022 Technology Vision report reveal that we’re entering a new age 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 interacting 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 must work through every single possibility to find the most efficient route, 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—working with massive data sets will be achievable for the average enterprise.
Accenture predicts that 80% of workloads will be in the cloud in the next few years. That means more opportunities to collect data produced by workflows and behaviors happening across the digital world. With quantum computing capabilities, companies will be able to extract insights from this ever-increasing volume of data to drive 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 broadly influence their industry.” Insurers that take the lead to increase their computational resources could have an advantage as we move into 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.
Using data to its full potential
Quantum computing is an extension of the cloud and could make what we’re already doing in the cloud more valuable. In one of my recent posts, I talked a little bit about how wearables and IoT technology will bring even more data to underwriters via the cloud. Currently, AI is supporting underwriters through the process of collecting, analyzing, and making sense of much of the data that’s available to them. But as data on individual customers continues to multiply, quantum computing can help insurers find larger patterns and make better predictions about where the market is going.
Quantum computing could also help insurers assess risk on a much larger scale. Risk assessment, at its core, is figuring out how probable it is that things will 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 partnership with quantum computing companies, IonQ and QC Ware). In the same way a quantum computer could quickly determine the most efficient shipping routes out of 20 trillion options, it could also determine the probability of an individual getting into a car accident at a certain intersection.
An important application of quantum computing is predictive risk modeling around the impacts of climate change. Quantum computing can handle the complex intersecting factors that contribute to assessing risk associated with environmental events like 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 might hold. With improved scenario modeling capabilities, underwriters can more accurately provide the coverage customers need while driving top-line growth, even as our climate becomes more volatile.
As we move closer to a world where quantum computing is part of every enterprise strategy, today’s insurers need to assess their current technical debt. Change is coming quickly. Once key achievements in quantum computing are unlocked, the gap between early adopters and laggards will widen quickly.
Taking the first steps towards quantum computing enablement
One of the major hurdles outlined in Technology Vision is the widening gap between technology innovation and the skills required to operate that technology. Leaders across every industry need to think about how they will train and hire the talent they will need to operate the organizations of the future, which include quantum computing. A study cited in Technology Vision from the UK found that there was a critical shortage of large-scale computing professionals. Insurers can create demand for these roles to incentivize jobseekers and focus on upskilling current employees.
Insurers also need to think about whether they have the right decision-makers in the room. Do you currently have individuals on your team who are capable of thinking through oncoming challenges and opportunities to form strong strategies for handling disruption? Having a diverse team tackling 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 on the right talent to support initiatives related to quantum computing, forging partnerships will help leaders achieve scalable outcomes at more reasonable cost—in terms of human, technological, and financial resources. The Technology Vision report recommends joining a consortium that facilitates quantum computing capability across the entire 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’s helped bring new medicines to market much faster than before using predictive modeling.
Insurance leaders are slowly joining the arms race for quantum supremacy. German multinational reinsurance company Munich Re is one of the founding members of the country’s Quantum Technology & Application Consortium. In the US, the Quantum Economic Development Consortium (QED-C) is one of the primary consortiums working on quantum innovation and members currently include companies like AT&T, Wells Fargo, Boeing and Honeywell. There’s plenty of opportunity for insurers to be the first in the industry to take part in quantum computing research and development.
From cloud to quantum
Quantum computing will change the way we use data, adding exponential value to the data that’s already being collected through cloud-based technology. The digital world will only become more enmeshed with physical reality. The volume of valuable data 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 need to take quantum computing seriously as a part of their overall cloud and data strategy.
I’d love to discuss how to maximize your cloud strategy for a quantum computing future. Please get in touch with me.