The effect of artificial intelligence on insurance and shipping

The use of telematics, continuous data flows and parametric insurance constitute challenges posed to insurance by the new digital environment, as this is formulated during the progress of what is known as the Fourth Industrial Revolution, or Industry 4.0, and in the aftermath of the pandemic.(2023) 23 STL 4 4

Traditional indemnity insurance reimburses a customer for actual losses that they have incurred. A parametric product, on the other hand, links the payment under the policy to a pre-agreed and independently verifiable trigger (the "parameter"). A parameter could be listed as a single event, an index or a specific customer outcome. The level of indemnity that is provided is pre-determined and established based on the chosen parameter being triggered and should be strictly correlated with a loss outcome for the insured.