By JASON REEDER, NBC News Staff WriterSAN FRANCISCO — The financial future of a major insurer is now firmly in the hands of a computer system that can predict whether a large insurer will have a good or bad year and when its customers will lose money.
Insurance regulators are considering whether fully automated systems that would automate the risk management and reporting of a large insurance company could be used in 2020 and beyond, according to people familiar with the matter.
In some cases, they say, a system that is fully automated could mean an insurer could be allowed to operate in more difficult or risky environments, including areas where there are fewer insureds.
The companies that have already gone through that process are the companies that are most likely to be the winners and have the best future in the market, according a person familiar with those discussions.
The systems are likely to get the biggest push as the health care market recovers, the person said.
A fully automated system would be a game changer for insurance companies, which are trying to avoid a repeat of what happened last year when the company with the best performance and the lowest premium was forced to buy out its own insurer in a merger with another insurer.
That merger led to the cancellation of about half of the insurance business at the major insurers, leaving them with fewer people insured and fewer customers.
Insurers have been struggling for years to make up for that.
Many of them have already cut their premiums in some markets, while others have been forced to sell insurance at a loss, or have seen profits cut sharply.
The industry is also facing the threat of a more competitive market with many more companies offering comprehensive coverage than it does, as the government tries to reduce the size of the market.
Insureds are also in the midst of a global reinsurance boom, as they seek to reduce their losses by selling less expensive coverage, such as health plans with a high deductible and co-pays.
Insurer executives have long said they have no plans to stop offering comprehensive health plans.
But with the reinsurance industry booming, they may find it harder to sell those plans, particularly if insurers are forced to raise premiums or cut coverage.
The financial crisis also forced the industry to take a long view of the future of health care.
Insurers were worried about the long-term effects of the financial crisis, as well as the possibility of a return to health care rationing or rationing of care.
Insulation companies were concerned that the health of their customers could suffer as more people have more health insurance, or if insurers had to lower their premium rates.
Insurancys Chief Financial Officer John McDonough told regulators in July that the company would be spending $1 billion to $2 billion to stabilize the financial markets, and that it planned to keep spending at that level through 2021.
In December, the company reported $1.3 billion in cash and cash equivalents.
That is a record for an insurance company.
McDonough said he expects the company will spend another $500 million in 2021 on capital expenditures to expand its presence in the health insurance market.
He also said that the insurance company will invest $100 million over the next two years to help improve its risk management, including creating an artificial intelligence platform to help it predict and analyze risk.
Insuring the futureInsurers are also considering whether they can use machine learning and AI to predict the future health of a company’s customers.
That’s a much different concept than using a computer to predict when and where customers will be sick, McDonoh said in December.
Insuring customers could take a big hit if the health risks for those customers rise dramatically.
Insure officials have already started talking to the insurance industry about what that might look like.
They are also looking at ways to build an artificial neural network that could be able to make predictions about the future in a way that would not require a human to make the predictions.
Insurer officials are also planning to launch a competition for the system.
The competition, which would be open to any company with $1 million in annual revenue and $10 million in market cap, would be funded by a venture fund.
Insure officials are hoping to attract at least five companies to compete.
The system could take another 20 to 30 years to develop and could cost as much as $2 trillion, Mc Donoh said.
Insulators are also discussing whether they should offer the technology to insurers.
Mc Donough said the technology could help insurers make decisions faster.
Insurgent Insurers is the largest of the four large insurers in the country, with a market cap of $12.6 billion, according the company’s website.
The other two are Aetna and UnitedHealth Group.
The company is also in talks with other insurers to expand their business, said company CEO David R. Johnson.
UnitedHealth is also talking to insurers about expanding