Paul the Insurer 16: Where Art and Insurance Meet

Quantum computing is seen as the next big technology revolution. For the insurance industry, however, it will initially have a huge impact on risk models, pricing, simulations and compliance. work in secret.

Quantum computing is a hype topic. But while spectacular headlines report on breakthroughs in research and cryptography, the actual change in the insurance industry will take place rather quietly. Behind the scenes, deep in data centers, where computing power reaches its limits today.

Digital assistants such as “Pavel” are already analyzing the potential impact on the insurance business and the prospects are far-reaching.

New dimensions in risk management

Reinsurance portfolios consist of countless variables: Regions, contract structures, cover limits, terms. Finding the optimal combination of these is like looking for the famous needle in a haystack.

Quantum computing massively accelerates this optimization. Billions of possible variants can be analyzed simultaneously. The result: more efficient portfolios, better calculated risks, more stable markets.

Faster disaster simulations

Whether hurricanes, earthquakes or forest fires, insurers regularly simulate scenarios with thousands of runs. Particularly rare, extreme events are difficult to model today.

Quantum-based Monte Carlo simulations should drastically speed up these calculations. This not only improves pricing, but also resilience to climate risks.

A sharper look at fraud

Fraud detection is an eternal race against complex networks of claims, data points and connections. Quantum-based graph analysis and machine learning can detect hidden patterns faster than traditional systems.

The potential: billions in losses per year could be reduced.

Individual pricing in real time

Hyper-personalized tariffs are seen as a model for the future of the industry. However, calculating them is extremely mathematically demanding. Quantum computing enables real-time optimization across millions of parameters, from driving behavior and health data to life stage.

This makes insurance even more tailor-made.

Better forecasts for reserves and claims

Classical models reach their limits when it comes to uncertain or rare risks in particular. Quantum computing can deliver more precise predictions using probabilistic methods – for example in refined Bayesian networks. This strengthens reserve management and risk prevention.

Climate risks: the long view ahead

Long-term climate and environmental models are among the most complex simulations of all. Quantum technology can help to better understand environmental interactions and assess portfolio risks more robustly.

This is becoming essential for insurers, both in regulatory and economic terms.

Serve regulators faster

Solvency and capital models are based on stochastic equations that require enormous computing power. Quantum algorithms promise considerable speed advantages here.

This makes it easier for supervisory authorities to verify and audit the system and increases its overall security.

The future calculates differently

Quantum computing will not turn the insurance industry upside down overnight. But the impact will be fundamental: more efficient processes, more precise models, better risk assessment. The change starts at the back end and ends with tangible benefits for customers.

If you want to understand this development, you don’t have to study physics. A look behind the scenes and perhaps a conversation with digital assistants like “Pavel” is enough.

Binci Heeb

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