Just as importantly, appraisers augmented by AI can spend more time focusing on the customer. New AI technology jobs will also be created in this growing market projected to hit $200B worldwide by 2020.

With all of this in mind, here are five trends on the horizon for AI and insurance in 2018.

No. 5: All major insurers will harness AI

Looking forward to 2018, we believe that trialling AI will become a necessity for properity and casualty claim executives, and that those who embarked on the journey in 2017 will already be building operational competitive advantage.

No. 4: AI finally comes to the consumer

This year, consumers will finally feel the impact of AI.

There is a lot of excitement with insurers around photo estimating. The customer will be able to take photos after an accident and instantly receive a repair estimate. By placing AI into the hands of the user, everyone will have access to fair auto repair pricing.

Instant estimating may also be the key to touchless claims: a driver has damage to their car, they access their insurer's website on their phone, take photos of the damage, send them to their insurer. AI algorithms in the background perform fraud checks, estimate the repair cost, and seconds later an offer for instant cash settlement is returned. The same thing is already happening in renters insurance.

No. 3: The race to touchless claims

For many claims with straightforward liability and no injury, automating auto appraisals is key to enabling full automation from first notice of loss to cash settlement, via the smartphone. Estimates range, but this could affect 20% to 60% of claims. Fraud will obviously be a major question for insurers and vendors to address, but here again the advances in analyzing complex, detailed data can offer novel capabilities for insurers to create ever greater competitive advantage.

Better still, photo-based AI for collision appraisal will finally give consumers a way to know the true and fair cost to repair their vehicles. AI will bring together all steps in the insurance value chain, including repair shops, estimators, and insurers. A simple photo of the damage will be the link between them.

No. 2: AI across the insurance landscape

2018 will see AI penetrate many areas of insurance. In addition to its use in auto insurance, computer vision will be used in property insurance appraisal. Drone footage analyzed by computer vision will help to characterize properties for risk profiling, or for determining roof damage. The value-add of AI will depend on the availability of comprehensive imagery at scale.

No. 1: Real-time analytics to prevent accidents

Lastly, a group of new InsurTech companies are using AI and analytics to predict accident risk at the user level so that preventative warnings may be issued. Metromile uses AI to identify and reward good driving behaviour, while allowing customers to pay for insurance in a new way. Warnings of hailstorms issued to drivers can serve as a nudge to ensure the car is not exposed to hail when the storm strikes. Feedback and tips given to drivers can help them to avoid accidents. Collecting real-time, user-level driving data is now possible thanks to telematics devices and smartphones. A startup called Nexar is building technology, including a cloud-connected dashboard camera, to help cars communicate with each other to reduce accidents between them.

2018 will be the year when the insurance industry starts to fully realize the benefits of AI, and consumers begin to see its impact. Is your company ready?

Originally published on Property Casualty 360. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.