Quantum computing is no longer the future; it is in many ways already here.
Thanks to more affordable accessibility through major cloud carriers, insurers can begin exploring how quantum computing can improve critical business processes for seemingly endless applications. Amazingly fast, quantum provides enormous capacity to enhance analytics for much more massive datasets at high volume. Quantum also speeds calculations and the ability to run a far greater range of scenarios in much more detail.
Until access via cloud solutions providers became a reality, deploying quantum computing power was an expensive and cumbersome proposition, requiring the purchase of specialized hardware exceeding $15 million. Without affordable access, insurers have been maximizing conventional computers by networking hundreds of graphics processing units (GPUs) capable of providing the computational power sought.
The affordable quantum computing power now available via the cloud has the potential to revolutionize the insurance industry, providing much greater speed, precision, and bandwidth. Cloud accessibility makes it possible for insurers to begin building infrastructure for quantum exploration and seek new ways to strengthen their actuarial modeling, product development, underwriting, claims administration, and more.
At the same time, however, insurers must remain cognizant that quantum computing could open the door to several possible risks important to guard against.
Simply defined, quantum computing is the expanded electronic capacity to perform multiple simultaneous analyses of massive datasets with great rapidity. Such computing power can quickly reveal new factors and variable combinations to enhance underwriting, reserving, and product pricing. Quantum can also facilitate deeper analysis to improve accuracy of market forecasts and simulations of more extensive population settings to enable market expansion.
On the front end, its capacity to analyze large datasets quickly and precisely can strengthen product customization and customer engagement by providing more accurate and personalized insights into customer behavior and preferences. These insights can help insurers tailor products and services to better meet consumer needs and design marketing campaigns that effectively connect those products to target markets.
Quantum computing can also strengthen machine learning applications by enabling more robust guidance for deep neural networks. By compressing what would have previously taken thousands of years of machine learning training into just a few hours, its computing capability can direct deep neural networks to make much more accurate predictions.
One of the most significant opportunities quantum computing presents is in risk assessment and underwriting. With the ever-increasing availability of new and massive datasets, quantum could enable insurers to determine the predictive value of alternative data sources in various combinations and then improve how the data is used in real-world applications.
Finally, quantum computing could help identify and ease barriers to efficient policy administration and claims management. By uncovering claim characteristics associated with complex scenarios and even fraud patterns, it could enable faster payouts for policyholders alongside cost savings for insurers.