Companies are always trying to figure out how to implement new technologies to improve their products for consumers. Two of the most popular emerging technologies today are artificial intelligence and blockchain.
Artificial intelligence (AI) refers to the use of complex algorithms and robust datasets that allow computers to do things that would typically require human intelligence, but more quickly and more accurately.
A blockchain, on the other hand, is a decentralized database in which each member of the network stores a copy of the transaction history and verifies future transactions, improving security compared to a more-traditional centralized database which is susceptible to being hacked.
Many companies are already exploring how they can implement these technologies to make better predictions, improve security, and much more.
Though AI and blockchain are already transforming much of our world for the better, they often come across as intimidating or dangerous to some consumers.
To gauge consumer sentiment around these two technologies, we surveyed 1,000 adult Americans, asking them how the use of AI and blockchain would affect their purchase decisions of something that the majority of them already have: car insurance.
So how do consumers feel about insurance carriers using AI?
To figure this out, we asked our respondents if they would be more or less likely to purchase a car insurance policy from a company that uses AI:
As shown, exactly half of respondents are more likely to purchase a policy from a company that uses AI, with 26% being “much more likely” and 24% being “somewhat more likely.”
Another 31% indicated that they are neutral or unsure, leaving only 19% saying they would be less likely to purchase an AI-powered car insurance policy.
These results indicate consumers are warming up to the idea of artificial intelligence making decisions when it comes to their insurance.
This may be partially due to the potential for cost savings when it comes to using AI in insurance. Since AI can save carriers time and money, consumers may see cheaper premiums as a result.
In addition, since AI can be “always on” and is much faster than a human performing the same job (such as underwriting or assessing damage) consumers can get through the often-daunting process of dealing with car insurance.
We also were interested in what type of consumers are most interested in AI-powered car insurance.
First, we broke the results down by gender:
As shown, males are much more supportive of car insurance companies using AI, with 64% indicating that they are more likely to purchase a policy. Only 30% of females, on the other hand, said the same.
This may be at least partly due to the lack of gender diversity in the artificial intelligence field. One study found that 80% of AI professors are men and only 18% of authors at leading AI conferences are women. This lack of gender diversity may lead to AI systems being discriminatory against women, possibly causing them to have a more negative outlook on it.
We also broke the results down by generation:
As shown, the Baby Boomers & Up group is the least supportive of AI in car insurance. This isn’t surprising as older people are often the slowest to accept new technologies that change the things they’ve been used to for much of their lives.
It was surprising to see that Gen Z was the second-least supportive of AI in car insurance. As the generation that has grown up with the most advanced technology, one would think that these young adults would be the most supportive of AI. Perhaps Gen Z is more concerned with the ethical issues surrounding AI or haven’t learned as much about its potential benefits as Millennials and Gen X.
Blockchain technology has the potential to solve many of the issues that hamper the insurance industry today.
Since all historical claims and information about damage could be permanently stored on the blockchain, the underwriting process would be much faster and fairer. In addition, the use of smart contracts could create a faster claims process that is devoid of fraud.
So are consumers supportive of blockchain technology in car insurance?
Like with AI, we asked consumers if they would be more or less likely to purchase from a car insurance company using a blockchain:
As shown, just under half of respondents indicated that they are much more likely (33%) or somewhat more likely (16%) to purchase car insurance from a company using blockchain technology.
Only 14% said they are much less likely (8%) or somewhat less likely (6%) to purchase a policy, while 37% said they are neutral or unsure.
As was the case with AI, it seems that consumers may be realizing the value that using a blockchain brings. While new technologies, in general, may seem unsafe to some, putting insurance on the blockchain would inevitably make insurance safer, faster, and cheaper.
We also broke the results down by gender:
Like with AI, males (65%) are much more likely to purchase a policy from a car insurance company using blockchain than females (27%).
This may be for the same reason so many fewer women support AI-powered car insurance: a lack of female voices in the blockchain and cryptocurrency industry. For example, the 2018 North American Bitcoin Conference had 84 male speakers and only three women. Similarly, a study from 2018 found that females account for just 14.5% of employees and 7% of managers at blockchain startups.
The breakdown by age is also similar to the results of our AI question:
The Baby Boomers & Up group is the least supportive of car insurance companies using blockchain, with only 18% saying they would be more likely to purchase a policy from one.
Millennials and Gen X are the most supportive, with 58% and 50%, respectively, saying they would be more likely to purchase a policy.
While Gen Z is slightly less supportive than Millennials and Gen X, more indicated that they would be more likely to purchase a blockchain-powered car insurance policy (39%) than those that would be less likely to (20%).