The way consumers experience insurance is on the brink of change, as digital innovations revolutionize the user experience. Yet while many insurers are keen to embrace artificial intelligence (AI), few are using it to drive profound impact.
KPMG observed that the primary driver for digital adoption was to simplify existing processes. This tunnel-vision approach is all too common and misses the powerful potential of generative AI (Gen AI) to transform business models and the way modern insurers operate.
The insurance sector is ripe for reinvention, and the case for Gen AI adoption is compelling, so why does research by Boston Consulting Group indicate that just 10% of companies are applying Gen AI at scale?
Many will agree that the insurance industry is risk-averse, and this "digital reluctance" is likely to be a major stumbling block. Standing still in an ever-changing world is not an option.
Thankfully, a small, growing number of forward-thinking insurers are carrying the torch of innovation. They truly understand that Gen AI is key to transforming the entire value chain, redefining customer interactions, improving operational efficiencies and, ultimately, setting a new bar for industry standards in the digital age. Most importantly, they recognize that Gen AI cannot simply be an afterthought but requires a commitment to companywide integration and a desire to evolve continually.
See also: AI in Insurance: 2025 Predictions
Embedding Gen AI Across the Value Chain
When fully integrated into an organization, at the heart of corporate strategy, Gen AI can achieve new heights in insurance distribution, operations and customer excellence.
Gen AI can enhance agent recruitment and retention strategies, streamlining the hiring process by efficiently sifting through vast amounts of applicant data to identify top-quality candidates. These tools increase the number of high-caliber recruits and ensure a better fit for the organization's specific needs. Furthermore, Gen AI can identify high-potential agents early in their careers, facilitating their growth through targeted and personalized coaching, upskilling and reskilling and development programs, ultimately improving retention.
Productivity gains are plentiful, with Gen AI empowering agents through an optimized sales journey, providing real-time assistance by analyzing customer needs, identifying gaps and prompting agents with product recommendations tailored to customers' specific needs.
Through Gen AI, agents will receive leads enriched with customer insights and product recommendations that are best aligned to their preferences and needs. Draft emails and suggested marketing content will be ready to go at the push of a button, saving agents valuable time while ensuring engagement with customers remains personal and tailored. The nurturing of leads through to conversion will also be enhanced with automated and timely communications. Gen AI can also help manage agents' performance more intelligently by simulating agent and team performance and recommending action plans to achieve targets.
From an operational perspective, Gen AI can provide medical and financial document summarization for underwriters and claims assessors, resulting in scalable operations, increased staff productivity and unit cost reductions. Customer queries are addressed more effectively, with contextual responses based on previous customer conversations, knowledge bases and policy-specific information. Contact centers are better equipped to provide personalized responses based on customer history and product information, enabling staff to focus on resolving more complex cases. Moreover, Gen AI can inject highly sophisticated social media marketing capabilities into agency apps to create compelling ways for agents to attract and engage with an entirely new customer base.
See also: Blending AI With Human Interaction
Safeguarding the Use of Gen AI
Gen AI is more than just an operational add-on for insurers; it must be embedded into the organization's very culture to maximize operational efficiencies, enhance the user experience and build trust.
Transformational projects require innovative leadership, significant investment, companywide buy-in and rigorous safeguarding to ensure the use of Gen AI remains ethical, accountable and transparent. That's why it is essential to establish a robust framework to assess existing AI risks, including reliability, fraud, impersonation risks, privacy and data governance, and new-gen AI risks, such as the generation of false, misleading or biased information.
Embracing Gen AI is a substantial undertaking for the modern insurer, but with a robust action plan, sustained budget and dedicated project team driving it forward, companywide integration can be achieved in just a few short years.
