Smart insurance, protected clients: AI meets ethics in Insurtech

Algorithms that calculate premiums in real time, 24/7 chatbots to handle claims and requests, predictive systems that detect fraud before it even happens.

Artificial intelligence is already a reality in the insurance sector and is deeply transforming how companies operate.
Insurtech firms are accelerating process automation to improve efficiency, reduce costs and offer increasingly personalised services.

But widespread use of automated technologies also brings new responsibilities: from data protection to algorithmic transparency and the risk of excluding individuals who fall outside statistical models.
Today’s challenge is not only technological — it is also ethical and regulatory.

The algorithm in service of the insured

The integration of AI in insurance brings several advantages.

It speeds up policy underwriting through machine learning and natural language processing, enabling the analysis of vast data sets for fast approvals and accurate risk profiling.

It transforms pricing logic with predictive models that combine diverse inputs — geographic location, medical history, vehicle data — to enable real-time dynamic tariffs.

This leads to usage-based insurance: personalised premiums that reward responsible behaviour.

The picture is completed by the use of intelligent chatbots and virtual assistants that can provide 24/7 assistance, generate quotes, manage claims and enhance the overall customer relationship.

Predictive analytics and fraud prevention

Claims management is a strategic area where AI accelerates assessment and settlement by integrating weather data, incident history and imagery from smartphones or dashcams.

Computer vision enables automatic damage estimation, with clear cost-saving benefits.

Fraud prevention is also evolving. Algorithms analyse relationships between involved parties, detect anomalies and flag inconsistencies in statements.

Potentially fraudulent claims are identified in real time, protecting both the insurer and honest policyholders.

Insurance enters the era of predictive health

AI’s impact extends into healthcare insurance.

Insurers integrated with wearables and IoT sensors can monitor policyholders’ health, anticipate medical conditions and offer more targeted, prevenive coverage.

Telemedicine is becoming a structural component of health policies, powered by virtual assistants that analyse symptoms, support diagnosis and manage chronic patients' follow-ups.

By 2030, over half of insurance policies are expected to include at least one AI-driven component.

The other side of innovation: transparency, privacy, inclusion

But every revolution has a downside.

The pervasive use of AI in insurance raises urgent ethical and regulatory issues, starting with decision-making transparency.

Many algorithms operate as “black boxes”, making it unclear how claims are accepted or denied, or how premiums are calculated.

This becomes particularly problematic in light of Article 22 of the GDPR, which prohibits fully automated decisions with significant legal effects without a proper legal basis.

There is an urgent need to adopt models that explain how algorithmic decisions are made.

Clients must understand why a decision was taken, what data it relied on — and most importantly — have the ability to challenge it.

In parallel, data protection and cybersecurity must remain top priorities.