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quantumapps@weforum.org // Weforum2030

Brief Description

Our solution utilizes quantum computing to optimize portfolio assignment decisions for a reinsurance contract. We deliver an interactive crash-course on reinsurance, take you through a quick tutorial and let you compete with a real quantum computer on a large reinsurance problem.

Problem Statement

Natural disasters and catastrophes pose a serious risk to the business stability of major insurance companies. Insurers purchase reinsurance to protect themselves from very large losses that may result in an unacceptable volatility. Deciding which portfolios should be covered by the reinsurance contract can be formulated as a mathematical optimization problem. However no classical solution has been found yet to solve the resulting problem.

Solution

Our solution leverages a physics-based computing method known as annealing to calculate good solutions to the reinsurance problem in a fraction of the time necessary for classical exhaustive search. By formulating our reinsurance parameters as a mathematical optimization that runs on both quantum and classical annealers, we’ve shown near optimal results for small and medium sized problems. With this experimental app, AXA demonstrates the viability of quantum as a solution to bridge the gap between today’s classical computing methods and business-relevant optimization challenges within insurance.

Key Importance

• Physics-based computing for optimizing high value reinsurance contracts
• Classical methods such as exhaustive search are time-prohibitive
• Annealing shows future promise for production problems with business-relevant time-to-solution
• Given the size of the market, even small percentage improvements could lead to large financial benefits

Key Highlights

Value Proposition & Benefit: Our approach shows promise for calculating reinsurance parameters, which maximizes the ratio of net profit over volatility of retained losses, within a business-relevant response time.

Advantage of Quantum Technology

Classical methods such as exhaustive search are non-viable due to time and memory constraints, even on HPCs. Using quantum computing, we’ve demonstrated a viable pathway to calculating reinsurance contract parameters, that overcomes the classical constraints.

Disclaimer

This demo is for demonstration purposes only and not for any other purposes. AXA owns all rights, title, and interest in this demo. AXA makes no representations or warranties regarding this demo. To the extent permitted by law, AXA disclaims all liability including direct and indirect, incidental, or consequential damages, including loss of profits, arising out of or relating to the use of this demo. The laws designated by AXA providing this demo will govern without reference to conflicts of law principles.