A recent study conducted by Conning has revealed the swift integration of artificial intelligence (AI) within the insurance industry. The survey, which engaged C-suite decision-makers in insurance companies, indicated that 77% of respondents are either in the process of adopting AI or have already done so, marking a significant increase from the 61% adoption rate in 2023.
Furthermore, the survey highlighted a growing interest in large language models (LLMs), with 67% of companies currently piloting this advanced AI technology. Scott Hawkins, a managing director at Conning, underscored the importance of AI in enhancing efficiency, customer satisfaction, and data management within the insurance industry.
The impact of AI was explored across three key areas of the insurance value chain: sales and underwriting, operations and claims processing, and risk control and pricing. AI algorithms are improving the accuracy and efficiency of underwriting processes by analysing extensive data to make more informed decisions and minimize human errors.
Additionally, AI-powered systems are revolutionizing operations and claims processing by automating mundane tasks, streamlining workflows, and aiding in fraud detection. These tools are also enhancing insurers’ ability to assess risks accurately and set prices accordingly in the domain of risk control and pricing by analysing historical data and real-time information to predict future trends and potential losses more effectively.
While the survey found a high affinity for machine learning/predictive analytics (ML/PA) across the value chain, it excluded robotic process automation (RPA) and telematics from its findings. In terms of technology adoption by value chain component, the survey showed that ML/PA had the highest adoption rate in sales and underwriting, followed closely by LLMs. In operations and claims processing, ML/PA and NLP each have been adopted by 47% of respondents, while LLMs are currently being piloted by 65% of respondents. Regarding risk control and pricing, ML/PA has a higher overall adoption rate (35%), with LLMs showing potential for high adoption with 62% currently being piloted.
As the insurance industry continues to evolve, the adoption of AI technologies is expected to necessitate changes in the required staff and positions needed to run a modern insurance company. Despite the significant investments required for integrating these technologies, the potential benefits in terms of customer insights, profitability, and operational efficiency are evident.
For those interested in purchasing the full report, it is available on Conning’s website.
In conclusion, the integration of AI within the insurance industry signifies a transformation in its operations and a move towards greater efficiency and competitiveness. The future of insurance is undeniably linked to the continued adoption of AI technologies.
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