Advancing AI Across Insurance

As featured on BusinessMirror:  Advancing AI Across Insurance

The evolution of artificial intelligence (AI), including the new wave of generative AI (Gen AI), is transforming industries. Many insurance organizations are already using AI to provide new services for customers and enhance back-office processes, however, the pace of implementation is hindering progress and there are growing concerns around trust, accuracy, and security. So, how can insurance firms adopt AI effectively and unlock its full potential?

Many insurance firms have already implemented machine learning or other AI solutions at an operational level to improve business processes. With enough training data, these algorithms can better analyze risk and predict outcomes, adding accuracy to risk models and pricing structures. These solutions are often developed to solve a specific problem, but there is an opportunity to quickly adjust for wider use across the value chain. Both Traditional and Gen AI could empower organizations to enhance actuarial models, deliver personalized insurance cover, or even increase the pace of insurance claims. But the process of doing so appears to be slow, with testing and implementation processes often taking several months to complete.

Insurance organizations are approaching AI transformation strategically and with cautious optimism. Many have seen early success with a handful of integrated AI solutions, where use of the technology has typically been developed to tackle a specific problem, such as quality assurance. Others are developing an understanding of the wider capabilities through integrated platforms, such as Microsoft Copilot, learning to quickly create human-like text, images, audio, and videos.

While businesses understand the potential advantages of scaling initiatives, there is a hesitation to introduce AI more widely across the workforce, partly due to the speed of evolution and associated risks. There are also growing concerns around data quality along with ethics and biases (particularly when using legacy datasets), in addition to regulatory compliance across jurisdictions. The inability to respond to these could result in significant risk to reputation and rising pressure from shareholders.

While the opportunities aligned with AI are significant, the associated risks are also increasing. Eighty-five percent of insurance CEOs believe that generative AI is a double-edge sword, in that it may not only aid in the detection of cyber-attacks but also provide new attack strategies for adversaries. However, avoiding AI altogether will also expose insurers to the risk of missing out on potential opportunities and benefits and losing competitive advantage.

By combining deep industry and functional knowledge with the right technologies, KPMG firms can help you to unlock business value and harness the full power and potential of AI with speed, agility, and confidence.