How AI is set to transform insurance in 2024

How AI is set to transform insurance in 2024 | Insurance Business Canada

Technology

How AI is set to transform insurance in 2024

New report highlights challenges and opportunities for the industry

Technology

By
Mika Pangilinan

Artificial intelligence is set to play a transformative role in insurance processes for 2024, according to new analysis from Xceedance, a global provider of strategic operations support and technology services.

The report, which drew insights from discussions with carriers and MGAs worldwide, outlined how the use of AI has evolved in the insurance sector. It also made note of the ways that insurers will be looking to advance their use of the technology across multiple business processes.

One of these issues tackled in the report involves the use of generative AI.

While the industry has seen success with task automation and machine learning, Xceedance noted that insurers will need to embrace the next phase of AI to leverage its full benefits. This includes acclimating to having AI make key decisions in areas like coverage levels and claims recommendations. It also requires extensive testing across business processes.

Another key issue focuses on the impact of AI on existing workflows.

According to Xceedance, most of these workflows were designed over 60 years ago and have remained largely unchanged for decades. AI integration would require insurers to overhaul current processes by combining technology and data.

In line with this idea of overhauling outdated workflows, Xceedance also highlighted how AI can facilitate a more personalized approach to insurance.

Traditionally, the report said, insurance models have grouped risks, but AI’s data processing capabilities allow for individual risk assessment. This could open new market opportunities for insurers and allow them to reevaluate previously unconsidered business.

Lastly, the Xceedance report emphasized the need for developing a wide array of data sources.

The report stated that the success of generative AI depends on access to diverse data sources, ranging from telematics to geospatial data. Insurers would need to incorporate these data streams into AI platforms for effective decision-making, while also ensuring that they are accessible to employees.

“The impact of AI is not something we’ll see overnight,” said Xceedance CEO Arun Balakrishnan. “It’s important for insurers to be strategic, moving quickly in some areas and proceeding with caution in others.”

What are your thoughts on this story? Feel free to comment below.