Quantum Leaps: Transforming Insurance Through Quantum Computing

Written at Apr 16, 2024 2:33:03 PM by Eleni Bouziou

This time last month, I was able to take a minute to reflect on the days preceding me at Europe’s largest InsurTech conference, a two-day event where all innovation, inspiration, and interaction meet. There were numerous panel discussions, multiple talks, and undoubtedly a lot of thoughts over both days. As someone deeply intrigued by the potential of emerging technologies to revolutionize traditional sectors, this event was a goldmine of insights and possibilities. Picture this: a bustling two-floor conference hall filled with industry experts, tech enthusiasts, and innovators, all gathered to explore the cutting-edge advancements reshaping the landscape of insurance and hear more about the current industry trends. Undisputable, emerging hazards and new technologies have caused significant changes in the insurance and reinsurance sectors. Among the foremost emerging concerns lie cyber risks, uncertainties surrounding climate change, and financial instability. Emerging technologies such as Artificial Intelligence (AI) and quantum computing are swiftly garnering traction amidst this landscape.

While artificial intelligence (AI) has become a household term, quantum computing remains a mystery to many. It might sound too technical to grasp or even seem irrelevant. And then comes the question of what does quantum computing have to do with insurance? Well, as it turns out, quite a lot. I had the chance to attend an insightful session regarding the same topic and I have learned more about how exactly quantum computers work and gained a deeper understanding of how this technology intersects with our industry.

Before we talk about the consequences of insurance, it is important for people who are unfamiliar with the phrase to have a better understanding of it. Unlike classic computers, which process data in binary bits (0s and 1s), quantum computers harness the power of superposition and entanglement to perform complex calculations exponentially faster. While this concept may initially appear daunting, the essence is clear: quantum computing offers vast potential for solving problems with unprecedented speed and precision.

Among the main uses of quantum computing in the insurance industry are risk evaluation and portfolio optimization. Large volumes of data about policies, claims, market trends, and risk factors are handled by insurance companies. Conventional computing techniques frequently have trouble processing this data effectively, which causes delays in decision-making and less-than-ideal results. On the other hand, quantum computers assess risks more accurately and optimize companies' portfolios for maximum profitability. Another area of paramount importance for insurance companies is the cybersecurity, as safeguarding sensitive customer information and financial transactions. Quantum encryption algorithms offer unparalleled levels of security to protect data.

Of course, quantum computing has its own set of difficulties and restrictions, just like any other new technology. The field is still in its infancy, and only the wealthiest of organisations can afford the extremely specialised infrastructure and knowledge needed for it. But for sure, is a technology that will shake up the waters, we are waiting to see in which direction.

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Eleni Bouziou