AI is changing the nature of work in the insurance industry

by Tracey Malcolm , Max Fogle & George Zarkadakis, WTW —

With applications of artificial intelligence technology spreading throughout the insurance industry, fresh approaches to job design, talent acquisition and training are needed to take full advantage

Cost containment or reduction is a constant challenge for insurers, particularly in light of recent inflationary pressures. Innovation is key to unlocking unmet markets and better meeting customer demands economically – not only in how carriers use emerging technology, such as AI, but in who (or what) does the work in a hot talent market where certain skills are in high demand.

Already we see many insurers moving toward more digital business models to position themselves for future success. And whether through deploying advanced technologies, creating an enhanced customer experience, or delivering transparent communications around key topics such as the use of AI in their businesses, key work and talent strategies are essential accompaniments and drivers of success.

The irony of technology delivering the human connection

A central feature of those strategies is finding an operationally and cost-effective balance between technology and people. For example, a key emerging customer experience trend has been keeping humans in the center of the service. It’s no surprise that interactions with a fellow human being helps customers feel more comfortable and engaged throughout the insurance claims lifecycle. The irony is that facilitating the most convenient customer experience often depends on technology.

This is the case with communication facilitated by AI-driven chatbots. Technology acts as the gatekeeper to a more targeted human connection. The advent of highly sophisticated AI language models called large language models (LLMs), such as ChatGPT, could be a game changer in how businesses interact with their customers. Given the capabilities of these new technologies, chatbots can become more conversational and capable of handling a wider range of customer queries. By reducing workloads for human customer service advisors, advanced LLMs can automate not only routine and repetitive tasks, but also variable and creative tasks that have been considered, until recently, ‘human only’.

Work strategies continue to evolve

What does AI mean for talent and training needs?

WTW’s analysis of top jobs and skills in demand in insurance shows a sector committed to the use of technology. We see the jobs of data scientist and data engineer among those most in demand, reflecting how AI continues to be a prioritized and disruptive technology. These jobs apply automation and computing skills (such as MLOps, DataOps, Python, R, and Data Analysis) to create more efficient processes and provide customers with more personalized solutions.

As insurance organizations integrate technology and digital solutions alongside their employees, co-work and collaboration between insurance talent and AI systems will increase, providing a unique opportunity to improve the relationship between human and AI systems.

This might involve improving training on the use of technology, facilitating more efficient troubleshooting where issues arise or establishing reverse mentoring schemes where digitally savvy colleagues provide guidance to those less familiar with digital solutions.

Another key step is creating clear communications around the purpose and work-role of AI, so that employees, management, and boards of directors understand the role of AI in the organization, the work it is doing, and how it is being managed (like the performance of an employee). As insurance talent’s and other stakeholders’ understanding and trust of these automation co-workers builds, there should be opportunities to improve employee experience (through increased productivity and reduced attrition) and customer experience.

With such improvements, though, also comes the need for awareness of potentially altered risk factors for the business. As insurance organizations, like those in other sectors, rely more heavily on technology to transform, different risk factors arise – cyber, operational, reputational, financial and many more. Our research shows that across all sectors over a third of organizations (37%) have been effective in managing people, business and operational risks over the past three years. Strengthening organizational capabilities to better manage these changes will be a key part in de-risking transformational progress.

The following capabilities can de-risk and create more resilience and agility during these transformations:

Enabling Connections
Achieving new ways of working
Sustaining drive

Read more in WTW’s blog.

About the Authors

Tracey Malcolm is Global Leader, Future of Work and Risk, WTW.

Max Fogle is Director, Executive Compensation & Board Advisory (New York), WTW.

George Zarkadakis is Director of WTW’s Digital Incubator and leader of the Future of Work Strategy Advisory Services for Great Britain and Western Europe

About WTW

At WTW (NASDAQ: WLTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.

Working shoulder-to-shoulder with our clients, we uncover opportunities for sustainable success – and provide perspective that moves you. For more information, visit www.wtwco.com.

SOURCE: Willis Towers Watson