Quantum Computing: The Potential of the Second Quantum Revolution

Thomas

July 15, 2021

#Quantum-Computing #Essay

The topic of quantum computing (QC) has raised great expectations over the years (1), but its commercial use still seems largely limited. However, a closer look reveals that the second quantum revolution, the productive application of quantum mechanical principles in information processing, is already feasible. Google, one of the drivers behind commercially viable quantum computers, demonstrated quantum supremacy for a specific problem in 2019 (2). It is time to examine how insurers, especially those with a high degree of digitalization, could benefit from these new technological possibilities.

Quantum computing is not an easy topic to understand. As the physics luminary Richard Feynman once said: “I think I can safely say that nobody really understands quantum mechanics” (3). And yet today we have access to usable quantum computers. They may still be limited in their capabilities: they are not particularly fast and their memory leaves much to be desired. However, this does not diminish the enormous potential of the technology. We can confidently predict that quantum computers will become faster and more reliable over the coming years. A powerful coalition of renowned universities, tech giants, and start-ups is constantly working on the broad breakthrough of this technology. IBM, for example, aims to build a quantum computer with 1,000 qubits by 2023. By comparison, Google’s quantum computer from 2019 had just 54 qubits (4).

The qubit forms the basis of quantum computers #

What is a qubit? A qubit is a quantum mechanical two-state system that must have certain properties to be considered for use in a quantum computer. Various technical implementations are currently being explored, including ions in ion traps, superconducting electronic circuits, and photons. But why are calculations with these qubits so interesting? The answer lies in the ability of quantum mechanical systems to exist in a state of superposition. They can theoretically carry two values at the same time, meaning two calculations can be performed simultaneously on one qubit. If two qubits are quantum-mechanically entangled, they can perform 2 to the power of 2 calculations simultaneously. With three entangled qubits, this becomes 2 to the power of 3 (5). IBM could therefore theoretically carry out a gigantic number of simultaneous calculations with 1,000 qubits. Nevertheless, such a quantum computer would be just another milestone towards exploiting the full potential of the technology, such as breaking current encryption standards on the Internet (6).

Rapid progress in the basic requirements for complex calculations #

The number of qubits alone is not decisive for the progress of quantum computing. The challenge in building genuine quantum computers lies in avoiding decoherence of the qubit system: shielding it from any environmental influence such as vibrations, temperature fluctuations, or electromagnetic waves. If this is not achieved, or only partially, a complex calculation will increasingly accumulate errors and the result will ultimately disappear in the noise (7). Part of the solution may lie in the quantum threshold theorem approach and the use of quantum error correction algorithms. These should ensure correct results even with complex calculations. Although the problem of decoherence has not yet been conclusively solved, progress is accelerating and a viable solution is within reach (8).

Early adopters are already using existing QC ecosystems for exploration #

This is why tech giants such as Microsoft, Google, Amazon, and IBM are already offering cloud-based quantum computing ecosystems. These provide direct access to QC emulators, simulators, or even real quantum computers. Access is available not only to researchers but also to interested companies and individuals. IBM, for example, allows free use of a five-qubit quantum computer (9). Numerous start-ups such as Xanadu and Rigetti are also working on quantum computers and making QC platforms publicly available. Early adopters including Daimler, JPMorgan Chase, Samsung, and other large companies from the financial and tech industries (10, 11) are already using the IBM Quantum Network to prepare for solving complex problems efficiently in the future.

A roadmap for the quantum advantage #

What roadmap will make insurers “quantum-ready”? A five-point strategy is advisable (13):

Identify technology experts as quantum champions who understand the potential benefits of quantum computing and the impact on your business model.
Based on this expertise, develop concrete use cases and quantify the resulting benefits.
Experiment with real quantum computers or simulators. Derive steps for technological integration with your infrastructure and IT architecture.
Follow the dynamic developments in QC and analyze emerging best practices, toolkits, and ecosystems in relation to your identified use cases.
Act as soon as a quantum advantage can be established.

References #

Please note that this article was originally published with a former employer and is available here in its original German version.