AI, GenAI: What’s Ahead for the Insurance Industry?

There is strong evidence that consumers still want human interaction, but today’s consumers are also tech-savvy and want the speed and ease that AI technology promises.

(Image credit: Mohamed Nohassi/Unsplash.)

There is new attention on artificial intelligence (AI) in the insurance industry. It’s been ignited by the arrival of GenAI in late 2022. While traditional AI focuses on making predictions and learning from data, GenAI has the ability to create new and unique solutions based on learned data. It includes images, video, and other content. GenAI takes AI a step further in a new direction.

For data and process-intensive industries, like insurance, these innovations can be of particular value. Many insurance companies and industry professionals are already leveraging both, but up to now, it’s been in a relatively limited capacity. AI and GenAI have the potential to do much more, particularly GenAI. Insurance companies and leaders need to get ready.

Increased Practical Use

Expectedly, increased practical use of AI and GenAI is a big trend for the coming year. It will be very new and nascent for some time, but advancements are expected here. Current use such as customer service chatbots will expand to business operations, processes, risk assessment, product development, fraud detection/prevention, and a lot more. We will increasingly see AI and GenAI reach their full potential in the future. A main benefit is the potential to help improve and streamline processes, crunch data and assist organizations to succeed. This can have a particular impact on insurance business.

Rise in Turnkey Solutions

AI and GenAI are still in their very early stages. The technologies and what they can achieve are at an explorative point. Practical usage currently requires heavy customization, as real-world applications are limited. This will change. For insurance, it could include compliant-ready AI and GenAI tools, designed specifically for the industry. Or, tools that can be more easily adapted to meet insurance’s unique needs. Many of the current  obstacles, glitches and barriers of AI and GenAI will also improve. It will be some time before AI/GenAI solutions are ultra user-friendly, but there has already been an explosion of new, more accessible prospects.

Mass Industry Accessibility & Advancement

In the past, AI was widely limited to large corporations or specific applications and uses. At present, GenAI requires significant programming and resources. This has made it challenging for smaller organizations or industry professionals to use these innovations. But, AI/GenAI are increasingly within reach for insurance organizations of all kinds and sizes, as well as insurance agents and brokers. There are a broad range of ways today that AI and GenAI could benefit smaller cap companies, startups, professionals, etc. These include customer service, decision-making, marketing, and other business functions. The potential of these technologies can be particularly of value for individuals and businesses to help gain a competitive advantage.

New Potential & Competition

AI and GenAI are already changing the insurance business and will continue to do so. There will be new and better ways of doing business, and potential expansion, for market incumbents. It includes a new ability to streamline and augment business processes, increase margins, and drive revenue. New companies with innovative AI/GenAI ideas are also sure to come. That would mean new competition for insurtechs and other key players, who will face fresh and agile companies that have the potential to incite real, major change. With a variety of ways that AI and GenAI can be used in the insurance business, its disruptive potential is significant.

Big Obstacles, Big Opportunity

Complex industries like insurance are particularly ripe for AI and GenAI’s potential, but the intricacies of these markets can hinder adoption. Full-scale market adoption by insurance leaders will likely take time. The industry has a large number of rules and regulations that users must meet. Compliance, risk aversion, and other issues are common barriers to the rapid adoption of new technologies and products. Insurance leaders and professionals can help by getting involved in AI/GenAI advancement. The industry doesn’t have to wait for the technology business sector to develop what it needs. We can lead the way ourselves or collaborate with AI/GenAI leaders to blaze the trail.

While the insurance industry is in the early stages of utilizing AI and GenAI, it will have to accelerate its involvement and adoption in the coming future. There also remains strong evidence that insurance consumers still want human interaction, especially with specific aspects of insurance. But, today’s consumers are also tech-savvy and want the speed and ease that AI technology promises. It’s a balance, and AI/GenAI are likely going to play a big part.

My company began using GenAI last year. We created an AI customer service chat bot we call “Emma,” which resulted in significant improvement in online customer engagement rates and question resolution. Relying on Emma to resolve common customer issues, our live customer service team was better able to focus on more in-depth customer needs. It improved overall customer satisfaction and increased efficiency. This example was shared as an example of practical AI use by ITC chairman Caribou Honing during private sessions at the 2023 ITC conference where AI and GenAI were top themes. Today, we’re exploring AI elsewhere in our company.

J.D. Power’s recent Insurance Intelligence Report, also echoed the imperative for continued digital adoption in our industry. AI and GenAI are likely going to be at the forefront. Insurance leaders and professionals need to explore both innovations now in order to stay ahead of the curve.

Reflections on ITC 2022

 

Dustin Lemick // Dustin Lemick, CEO and board member of BriteCo, is a third-generation jeweler with over thirteen years of retail jewelry experience. Lemick’s family has owned and operated retail locations in the Chicagoland area for over seventy years. He graduated with a BS in economics from the University of Wisconsin-Madison and holds a Graduate Gemologist degree from the Gemological Institute of America (GIA). Lemick has been processing and handling jewelry claims for 10+ years for large primary insurance companies such as State Farm, Allstate, Chubb, and Farmers. He has in-depth, proficient knowledge and expertise in appraisal systems, diamond and gemstone markets, retail pricing models, insurance replacement models, and jewelry quotation pricing systems.

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