The evolution of artificial intelligence (AI), including the new wave of generative AI (Gen AI), is transforming numerous industries. Whether it鈥檚 automated claims, assessing risk, personalization of products and services, or fighting cybercrime, insurance organizations are increasingly looking towards AI to help tackle complex and time-intensive tasks, and to streamline processes. However, there is an urgent need to pick up the pace in adoption of the technology. Despite the use of AI in a handful of areas and pilots taking place elsewhere, insurance organizations are not gaining an advantage on competitors by using this technology more widely. Doing so could enable businesses to work faster, more flexibly and develop more sophisticated models in response to the evolving market.
So, how can insurers adopt AI effectively and unlock its full potential?
This report is intended to support insurance leadership teams in using AI to transform their organizations. It also brings together insights from 乐鱼（Leyu）体育官网 professionals and industry leaders from Generali Italia, PassportCard, Prudential and Zurich Australia who share their perspectives on how to unlock the technology's full potential.
Key findings
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Insurance organizations are increasingly investing in this space, but projects are taking too long to get into production:
Despite the natural risk-adverse approach, insurance businesses are ahead of the global average when it comes to investing in AI use cases across the business. However, the slow pace of implementation is creating significant delays in progress compared to other industries.
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A careful balance of innovation and navigating risks are expected to be crucial:
AI offers untapped potential for those that are willing to embrace change, but it also brings new and concerning risks that should be considered as organizations further develop their AI strategy. By undergoing an internal maturity assessment, organizations can have better clarity on current capabilities and identify areas to prioritize. 乐鱼（Leyu）体育官网 firms鈥� tested maturity assessment framework enables organizations to do this effectively.
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Successful organizations will likely still be data-driven and people-led:
Before starting on AI transformation, business leaders should have a clear and robust transformation plan in place, and focus on having a solid digital foundation and clean data to help improve the output. Upskilling and empowering colleagues and teams to better understand the bridge between AI and data can support longer-term success, and provide additional value by leveraging AI as an assistant.
of insurance organizations see AI as the most important technology for achieving their ambitions听over the next听over the next three years.1听听
58%
of insurance CEOs interviewed said it would take three to five years for generative AI to provide a return on investment with increased profitability, fraud detection and cyber-attack listed as the top benefits.2听 听
How are insurers approaching AI?听
AI offers huge potential benefits for insurers, with the AI market size estimated to grow to US$79 billion by 2032.3听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听
Leadership teams acknowledge that AI could completely transform their operating models and ultimately, the customer experience. However, insurance organizations appear to be approaching the technology strategically and with cautious optimism.
Many insurers have already started introducing machine learning (ML) or other AI technologies to help improve specific business processes, such actuarial models and fraud prevention processes. In customer service, AI is being leveraged to confirm identity through voice recognition, to provide a timely response to online queries through use of chatbots, and to generate more sophisticated 鈥榥ext best actions鈥� for customer service agents.
With enough training data, algorithms can better analyze risk and predict outcomes, adding accuracy to risk models and pricing structures. 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.
There is also growing recognition among insurers that a successful AI journey will likely be intrinsically linked to the maturity of their digital transformation. AI thrives on quality data and is best supported by cloud-based infrastructure and agile operating models; firms that are yet to fully embrace this are becoming aware of the urgency to do so.
Navigating AI鈥檚 risks
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 adversaries4. Organizations should be mindful of this when developing and integrating AI solutions:
路听听听听听听 Confidentiality risks
路听听听听听听 Generative AI services 鈥榟allucinating鈥� or creating inaccurate outputs
路听听听听听听 Data poisoning
路听听听听听听 ESG regulatory and reputational risks, given AI鈥檚 power demands
路听听听听听听 Cultural risks over whether staff are happy to work alongside AI systems
However, avoiding AI altogether may also expose insurers to the risk of missing out on potential opportunities and benefits, and losing competitive advantage. Doing so presents opportunity risks through reducing organizational knowledge, cutting abilities to develop new products and processes, and the risk of being overtaken by more technologically confident peers.
How 乐鱼（Leyu）体育官网 professionals can help
By combining deep industry and functional knowledge with the right technologies, 乐鱼（Leyu）体育官网 firms can help you to unlock business value and harness the full power and potential of AI with speed, agility, and confidence. 乐鱼（Leyu）体育官网 firms have worked with global insurance firms to help deliver meaningful AI transformation, combining industry knowledge and actionable insights with leading technology alliances, developing robust frameworks and AI accelerators. 乐鱼（Leyu）体育官网 professionals are experienced in developing proof-of-concepts and scaling these into integrated digital solutions. And these processes have been used internally to review and enhance 乐鱼（Leyu）体育官网 firms鈥� capabilities.
Client zero
The need for human thought and oversight, data analysis, critical thinking and decision-making is not disappearing. And so, while clients are looking for support, they鈥檙e also interested in the lessons learned along 乐鱼（Leyu）体育官网 firms鈥� AI journey.
乐鱼（Leyu）体育官网 professionals are approaching this new future as 鈥榗lient zero鈥� and 鈥榳alking the talk鈥�, following the same advice that 乐鱼（Leyu）体育官网 professionals provide to clients 鈥� designing and implementing an AI strategy that aims to prioritize human centricity in the way 乐鱼（Leyu）体育官网 firms adopt innovation, and to enhance the 乐鱼（Leyu）体育官网 workforce of the future. 乐鱼（Leyu）体育官网 professionals align to regulatory and voluntary standards, such as the EU AI Act and the ISO 42001.
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乐鱼（Leyu）体育官网 global insurance professionals can offer:
路听听听听听听 AI 360 assessment of internal capabilities and support to integrate AI into your strategy.
路听听听听听听 Development of use cases and AI operating model aligned with your business objectives.
路听听听听听听 AI risk assessment and development of control and governance frameworks for AI.
路听听听听听听 Creation of a data foundation for AI integration, and support with developing models and tuning.
路听听听听听听 AI concept development with our global alliance partners to develop a scalable solution.
路听听听听听听 Workforce impact assessment and analysis on the impact of transformation on the organization.
Get in touch
Leanne Allen
Partner - FS Consulting Technology and Data, Data Science & AI capability Lead
乐鱼（Leyu）体育官网 in the UK
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1'乐鱼（Leyu）体育官网 Global Tech Report 2023鈥�, 乐鱼（Leyu）体育官网 International, December 2023.听
2 鈥樌钟悖↙eyu）体育官网 Insurance CEO Outlook鈥�, 乐鱼（Leyu）体育官网 International, December 2023.
听3Artificial Intelligence (AI) In Insurance Market Size, Share, and Trends 2024 to 2034, Precedence Research, July 2023.
4 '乐鱼（Leyu）体育官网 Insurance CEO Outlook鈥�, 乐鱼（Leyu）体育官网 International, December 2023.
