What quantum computing could mean for insurance

What will the P&C insurance industry do when quantum computers “think,” and behave, more like humans?

It’s not as far off as you think. Today, quantum computing is the preserve of national intelligence agencies and the world’s largest technology companies, such as Google, IBM and Microsoft.

But software companies will soon be able to leverage the new technology through those tech giants’ cloud services to build new products, says Brad Powell, vice president of software engineering with Rival Insurance Technology.

“At some point, there will likely be versions of this technology at the commercial level, but it’s not something for which brokers need to start carving out budget,” he tells CU, adding that brokers and MGAs will get the most out of quantum through software vendors building solutions on top of the technology.

Experts expect ‘quantum advantage’ — when these computers can complete complex tasks better than traditional computers — by 2030, at which time there will be more practical and commercial applications. As it stands, there’s ‘quantum utility:’ computers are smaller but stable enough to perform some tasks better than traditional computers, such as optimization and research problems.

“Within 10 years, you’ll see companies having these computers,” predicts George Beattie, head of innovation at CFC Underwriting. “Within 20 years, you might start to see more cloud-based application.

“And then, within 20 to 50 years, none of us really know. Because, frankly, you’ve got to view this [quantum] technology as woven into the other [technologies] driving the ‘new industrial revolution,’ meaning artificial intelligence, brain-machine interfaces… You can’t view these things distinctly.”

How quantum computing works

To know how quantum computing could affect Canada’s P&C insurance industry, it’s important to understand how it differs from traditional, classical computers.

Simply put, transistors running classical computers (including supercomputers) operate using binary digits: a 0 or 1. But quantum computers employ subatomic particles called qubits to form a ‘superposition’ — meaning they can hold not just a 0 or 1 value, but both at the same time, and all the possible values in between.

“You can actually store so much more data and do so much more calculation with it, because you’re not constrained by just 0s and 1s,” says Feite Kraay, alliance director for IBM, Kyndryl and ServiceNow with KPMG in Canada. “This is a complete revolution in how you approach computation — we’ve never done anything like this.”

This superposition of qubits within a quantum computer more directly aligns neural networks, or artificial brains, with how the human brain works, adds Beattie.

“We don’t think in binary code, we think in superpositions as biological computers. And so, a quantum computer in the context of AI allows AI to get much closer to the way that our brain works.”

Beyond today’s AI

Cutting-edge advances in generative AI, like ChatGPT, are all the rage now but these are also based on classical neural networks.

“As soon as you put a quantum computing engine into that field of research, things will get very, very dynamic,” Beattie says. “We’ll move from artificial narrow intelligence to something that will start to pass the Turing test where you won’t be able to tell the difference between the machine and the human when you’re speaking with a chatbot or with an avatar…”

As advanced as quantum computing will become, it won’t replace classical computing. “It’s not going to be a general-purpose computing solution,” Kraay says.

Beattie agrees, saying the technology likely isn’t a ‘must-have’ for every company. “What you’re not going to get is a quantum computing or AI insurance product, because these technologies act either as an accelerant to existing risks, or there will be distinct risks that pop out to the side that you can capture with specific policies.”

This is why insurance professionals need to put quantum computing on their radar, Beattie says. “It’s going to become tough for the industry, because we have a difficult history, I think, of product innovation and getting ahead of changes on time.”

Indeed, multiple sources contacted by Canadian Underwriter were unable to offer comment on the topic, citing a lack of knowledge about the area.

This article is excerpted from one appearing in the February-March 2024 print edition of Canadian Underwriter. Feature image courtesy of iStock.com/VLADGRIN