ARTIFICIAL INTELLIGENCE & TECHNOLOGY
Smart Cities and their impact on the insurance sector
14 July 2022 · By Ana Navarrina
Technology has changed our lives forever, and now it’s changing the infrastructure of our cities too. Smart cities, sometimes called digital cities, intelligent cities, or wired cities, are urban areas that collect electronic data from citizens, devices, and assets.
The idea is to use this data to better manage critical resources, reduce costs and resource usage, promote better living and working environments, and optimize city operations, thus improving the everyday life of citizens.
With smart cities on the rise, we thought it was an excellent time to look at the benefits they bring and the role the insurance industry will have in them.
What is a Smart City?
A smart city is an area that uses IT systems to monitor and improve operations and infrastructure. The main goal of a smart city is to fully optimize city functions, promote economic growth, and improve the living quality of its citizens. According to data from Statista, there were 174 smart cities across 80 countries in 2020, including London, New York, Paris, Tokyo, and Reykjavik.
There are many benefits to smart cities, some of them being:
They are safer. With help from visual intelligence and other AI-based programs, smart cities can use cameras for real-time crime mapping and optimizing traffic signals to prioritize first responders. With the UN estimating that 68% of the world population will be living in urban areas by 2050, optimizing our cities to make sure they’re safe for everyone is a key priority.
They are eco-friendly. Smart Cities are focused on reducing emissions and optimizing the use of energy. Smart buildings constantly gather data to assess power needs, and thanks to this, facilities managers can use this data to automate their electricity and heating usage, and lighting can be set to trigger at a certain brightness level, like when the sun sets. Heating can be adjusted based on real-time data, including occupancy level and current temperature. The traffic flow is also optimized through technology, and smart parking features are established.
They put the citizen at the center of their development. Every technological enhancement put in motion in a Smart City is thought to improve the daily life of the citizen and save them time.
What is the insurance industry up to?
The insurance sector is currently making great strides toward the future. Faced with a new, more digital, more demanding and less patient customer, accustomed to immediacy, insurers are immersed in the digitisation of their processes. Automation allows them to offer a more agile experience, dramatically reducing management time and costs. Artificial Intelligence and data collection and analysis, also a key factor in the new Smart Cities, play a fundamental role in this.
The fundamental role of Big Data
Data, its collection and analysis will be, as we said, fundamental in Smart Cities. It will allow conclusions and real-time decisions to be made to improve traffic flow, energy or water use and demand, or health or messaging services, among many other things.
This is where motor and home insurance and Smart Cities match: both want to find ways to solve problems and improve the lives of citizens, and both find the solution in big data and Artificial Intelligence. Ultimately, the data gathered by Smart Cities, if shared with insurance companies together with the evidence collected by the insured, could help speed claims management even more.
How the future of Smart Cities and insurance looks
With the right technology, motor insurers are able to manage policy underwriting and claims in a matter of minutes, thanks to the collection of evidence via the user's smartphone. This Visual Intelligence technology also has a tremendous impact on property insurance in the event of damp or broken windows: thanks to the pixel-by-pixel analysis of photos or videos taken by the insured, the cause of the damage, the cost of the repair and the professional who should come to the property are quickly determined.
The result: savings on journeys and costs and a much smoother experience. This also has a significant ecological impact, reducing the CO2 footprint of insurers, another key factor in the DNA of a Smart City.
Therefore, this new experience offered by insurers will be an integral part of smart cities. If you live in a Smart City, a motor and home claim will be resolved in the shortest possible time, remotely and digitally. You will save time, costs and travel, contributing to the ultimate goal of Smart Cities: to solve citizens' problems and make their lives smoother.
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Visual Intelligence applied to the insurance industry
Artificial Intelligence in general, and Visual Intelligence in particular, are very present in our days. Perhaps, much more than we imagine.