3D printing shortens development cycles, speeds products into the market quicker and can lower the cost of manufacturing, yet it also introduces new liability issues throughout the supply chain and can generate new cyber and intellectual property exposures.
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Artificial intelligence (AI) may seem like the product of science fiction, but technology capable of analysing and learning from patterns of behaviour are already operating in (and improving) our day-to-day lives.

Much has been written about these two technologies, but there has been less discussion of how they could improve the insurance process and benefit your business. In this bulletin, we take a look at these two emerging technologies and what they could mean for your business.

3D printing is transforming industries

In 2015, Adidas managed to print a running shoe with a sole customised to an individual runner’s characteristic foot shape and running style. Around this time, a fuel nozzle 3D printed by General Electric replaced traditional casting with 3D printed material to create a nozzle five times more durable and 25% lighter. These uses of 3D printing show the technology as it can be at its best: efficient, development-driven and customised to the needs of the user. 1

It isn’t always immediately clear where 3D printing fits into many industries, but its impact is far wider than you might expect. 3D printing has disrupted industries from automotive to aerospace, construction to engineering and even the medical field with prosthetics and joint replacement.

The liability risks of 3D printing

For all its positive aspects, the more widely 3D printing is utilised the more opportunity for risk there is and the more likely it is that premiums will increase. The further companies lean on technology, the bigger their need for a knowledgeable risk manager will be. While the technologies (and therefore risks) are changing all the time, there are the key areas which you should build into your risk management programme:

  • Property damage risk: if a product printed by you causes damage to property, then you could find yourself at risk of a lawsuit. This also applies to anyone involved with manufacturing or distributing the product.
  • Bodily injury risk: There are a number of elements that could result in a bodily injury claim. Defective design is one – for example if a prosthetic limb gives way resulting in injury. Another is if there is damage in the printing process which means it deviates from the design making it unsafe to use.
  • Misuse risk: Incorrect instruction could also be grounds for a lawsuit, especially if there is a failure to warn about the dangers of incorrect use.
  • Cyber and Intellectual Property risk: The files used to 3D print often contain unique data which if lost or stolen could lead to design sabotage or idea theft. Some cyber criminals deliberately target this data with the aim of producing copies for less money.
  • Errors and omissions: If the printed product does not work then a company using that product could suffer business interruption or financial or reputational damage and as a result choose to hold the manufacturer responsible for any financial loss due to this negligence.

The impact of 3D printing on insurance

New technologies generate new risks, and that’s where the insurance industry comes in. 3D printing technology has pushed brokers and underwriters to figure out how to respond to these new professional indemnity, product recall and product liability risks. For example, while 3D printers may reduce manufacturing costs, they do generate liability issues if the printer produces defective parts or an inadequate final product. In such a case, who is to blame – the manufacturer operating the 3D printer or the maker of the 3D printer? It is important to have tackled these risks before introducing 3D printing as a mainstay of your business.

On the flipside of this, 3D printing could lead to a more efficient claims process as policyholders could potentially diagnose and repair their own equipment. The use of a second 3D printer (provided by your printer’s manufacturer or your policy holder) could automatically generate replacement 3D parts. Reports believe that by 2025, 3D printed buildings will be regularly used and this means insurers will need to provide suitable covers and risk assessments. 2

The future is 4D

Technology is constantly evolving and 3D printing is not where the technology ends. Already work has begun on developing 4D printers, where objects can change shape after being made. For example, an Australian university have created a 4D water valve which shuts when exposed to hot water and reopens when the heat subsides.3 At present, this technology only exists in labs, but we can expect to see it in the wider world sooner rather than later.

What about AI?

When people think of AI they often think of robots or futuristic homes with voice controls, however AI is more widespread than you might think. Here are some common examples of where you’ll encounter AI in your day-to-day- life:

  • Behaviour-based policy pricing: sensors in Internet of Things (IoT) products can provide personalised pricing, for example automotive insurance based on use or health insurance based on lifestyle.
  • Customer experience personalising: Chatbots can use location and social data to customise conversations.
  • Faster claims settlement: Online claims portals and virtual claims adjusters can settle simple claims as well as using patterns of behaviour analysis to minimise fraud. Identity theft is one of the most common forms of fraud, and AI can work to prevent this. There has already been success with this technology in data security and preventing payment transaction fraud.

The benefits of AI for users

By 2025, we are expected to have more than 75.4 billion connected devices4, generating data which can be used to offer a more personalised consumer experience. This can range from push notifications warning you that an activity you’re engaging in has a chance of increasing your rates, or a health app which encourages you to reduce your premium via healthy habits. If you get into a car accident, you can use your app to quickly record the scene and gather information from the other party. Interconnected technology makes users day-to-day lives easier through reactivity.

The insurance impact of AI

84% of UK insurers surveyed by Accenture believed that AI will change or completely transform insurance in the next three years and 76% think their personal jobs will be transformed by AI.5 The continued use of AI means that by 20306, research estimates that manual underwriting will no longer take place for most personal and SME lines of insurance including life, property and casualty. Quotes can be developed in a few seconds, and claims can be resolved in minutes rather than days or weeks.

Human roles will still exist; people will be able to spend more time on important work: the 20% of unusual tasks that drive 80% of company value. 7 These redefined roles will focus on complicated or unusual claims, contested claims and claims concerning internet crime including cyber breaches, and spot-checks of AI technology.

Our conclusions

With 85% of executives expecting to increase their investment in AI over the next year, it isn’t just consumers and insurers who are likely to benefit.8 The use of 3D printing is also shaping up to disrupt a number of industries and bringing new risks and rewards with it. To successfully utilise these technologies you need an insurer who can respond to and evolve with new developments. We can help you to map your risks and design a customised policy that responds to your needs.

Want to know more?

To find out more, please get in touch with your usual Gallagher representative.