A new survey by technology company Sprout.ai found that more than half of insurance company respondents reported that their organisation is using generative artificial intelligence (AI), such as ChatGPT, that is capable of using datasets to generate realistic images, audio, and text.
Generative AI can create content that appears authentic and human-like, whereas general AI can perform intellectual tasks that a human can do.
According to Roi Amir, CEO of Sprout.ai, generative AI has “taken the world by storm”, with every industry taking note of the opportunities presented by the technology. In the insurance industry, AI is said to be expected to be worth US$35.77 billion by 2030.
Amir says the opportunities for creating efficiencies and improving the customer experience are “exciting and plentiful,” adding that while insurers often lag when adopting new technologies, the market has responded positively to generative AI. “The hype around ChatGPT has demonstrated the potential of generative AI from both operational and departmental perspectives. It is now top-of-the agenda for insurers at the board level,” he said.
The survey revealed the attitudes, opportunities, and challenges of more than 100 UK and US insurers towards generative AI in the insurance industry.
According to the survey, 59 per cent of respondents have implemented generative AI technologies. Middle managers and above are significantly more likely to use generative AI compared to people in more junior positions (62 per cent versus 18 per cent).
In the UK, 27 per cent of insurers are using the technology in their processes, while 40 per cent do so in the US.
When asked about the attitudes towards generative AI in their customer base, 47 per cent and 55 per cent of respondents in the UK and US respectively said their customers had positive opinions of the technology.
“This shows in no uncertain terms, consumers are aware of generative AI,” the company said. “They understand it and want to use it. It will soon become something they expect from their insurers, rather than a point of difference.”
Asked which business functions would benefit most from generative AI, more than half the respondents (54 per cent) said marketing and claims, followed by administration (47 per cent), underwriting (46 per cent) and customer ‘onboarding’ – the process that a new customer goes through to start using a product or service (43 per cent). Actuary and legal / regulatory functions came next at 22 per cent and 21 per cent respectively.
Improving the human experience for employees and customers emerged as a key benefit of generative AI for insurers. The leading benefit was improving efficiency and productivity of staff (61 per cent), while providing better customer service also rated highly (48 per cent).
Cost savings (56 per cent) and business growth (48 per cent) were also listed as benefits.
Despite the positive response to generative AI in the industry, Sprout.ai says there are barriers to overcome if it is to be implemented successfully, with staff training voted the leading barrier at 47 per cent.
Cost was cited as the biggest barrier for US insurers (48 per cent), but only 22 per cent of respondents were concerned about not seeing a return on investment. “This perhaps reflects a misunderstanding that high expenses, whether through IT transformation or operational costs, are unavoidable when implementing new technology. However, plug-and-play solutions such as Sprout.ai can reduce the time it takes to process a claim and increase operational efficiency without high IT transformation expenses,” the company said.
Lacking an understanding of the technology ranked as the lowest barrier (UK: 13 per cent), (US: 15 per cent), which Sprout.ai says reinforces the view that generative AI’s reach has expanded far beyond just those with deep technical expertise.
However, concerns about AI replacing jobs as well as safety and ethics persist, suggesting more needs to be done to bridge the trust gap.
“The key to success is embracing the technology while ensuring employees receive suitable training. Those insurers that manage to strike the right balance will set new standards for customer experience, unlock business growth, and remain competitive globally,” the company said.