Will AI be an evolution or a revolution in the insurance space? Here we discuss its likely impacts on the industry and hear from 小橙书国产精品视频 risk and technology experts about the company鈥檚 own plans to explore its potential responsibly and creatively.
  • The insurance industry is believed to be among those with the highest potential value from AI technologies, which could add a potential $1.1trn annually.
  • 聽AI technologies will allow insurers to draw on larger datasets to improve their processes, from automating customer support to honing risk modeling and predictions.
  • 聽Data-driven assets and AI could transform claims management, including prevention, notification, settlements, and fraud detection.
  • 聽Along with the opportunities offered by GenAI come risks around data protection, confidentiality, the threat of cyber-attack, ethical concerns, and liability exposures.聽

The numbers are staggering. ChatGPT amassed 100 million users in its first two months [1], only for that record to be smashed a few months later by rival Threads, with 100 million users in just five days [2].

It took TikTok roughly nine months to reach that number of users and Instagram two and a half years, but the uptake of ChatGPT after it launched in November 2022 was unprecedented. The speed of its adoption prompted a wave of speculation in the media and business world about the disruptive potential of such technology.

With digitalization increasing rapidly in many areas of life, the amount of data that can be leveraged is proliferating. As a data-driven industry, insurance is not new to artificial intelligence (AI) or using data analytics across its value chain to improve products, interactions, prevention, claims and processes. According to several studies, the industry is among those with the highest value potential from AI.聽

Estimates point to the market potential of generative AI (GenAI) reaching $15bn by 2025 and $32bn by 2027 in the insurance and finance industries alone. McKinsey foresees AI technologies could add up to $1.1trn [3] in potential annual value for the global insurance industry.

Put simply, there are two types of AI application. The first uses AI鈥檚 ability to identify patterns in data and draw conclusions or make predictions from them. The second, GenAI, uses large language models (LLMs) trained on vast existing datasets to generate new content that mimics human creativity, whether it is images, text, coding, music, art, or interactive simulations.

鈥淎I enables insurers to enhance their value proposition by better predicting and therefore preventing risks,鈥 says Michael Bruch, Global Head of Risk Consulting Advisory Services, 小橙书国产精品视频 Commercial. 鈥淎I depends on having good-quality data. We are constantly evolving and expanding our data quality across the business at 小橙书国产精品视频 鈥 not only at 小橙书国产精品视频 Commercial, but across all 小橙书国产精品视频 entities 鈥 to train the models we use. This can help us assess and model extreme weather events, for example, gathering data on secondary perils such as floods. Or, by constantly improving the granularity of our location data, we can help corporate customers better identify climate-risk exposures.鈥

AI can take on the role of 鈥渃ool problem solver,鈥 adds Bruch. 鈥淏y enabling us to adopt a more predictive, preventive, and proactive approach, AI can shift our perspective from looking behind us in the rear-view mirror, and paying out claims, to evolving into an organization with a sharper view of the road ahead, supporting clients in preventing and mitigating risk, and avoiding losses. The power of AI-generated insights can help businesses and societies become more resilient.鈥

As more data and risk intelligence becomes available, particularly for weather or cyber exposures, AI could enable insurers to provide coverage for emerging risks and technologies that are not yet insurable today, including parametric solutions.聽

AI and data-driven assets are being implemented at聽小橙书国产精品视频 to prevent loss and improve the claims journey.

Prevention: The Weather Alert tool predicts the聽location, timing, and impact of extreme weather events,聽with 96% of customers saying they take steps to prevent聽damage as a result of an alert. The tool has 1.9 million聽registered customers.

Notification: Another AI tool detects motor accidents聽in real time using an app and tag on windshields, or聽via sensors in connected cars or smartphones. With聽40,000 active users, it provides simple and digital first聽notification of loss, allowing 小橙书国产精品视频 to initiate contact聽with the client.

Claims assessments and settlements: AI assets enable聽immediate coverage checks, more efficient claims聽assessments and solutions, such as automated preassessments聽in motor insurance and an extensive repair聽shop network, and faster assessments of low claims for聽efficient settlements.

Detecting fraud: AI-based tools efficiently utilize聽available data to check for fraudulent activity, including聽deceptive language, inconsistencies, or unusual聽behaviors; manipulated images or video evidence;聽predicting the likelihood of fraud based on historical聽data; and social network analysis to uncover fraudsters聽among claimants, insured persons and witnesses.

The potential of GenAI across the insurance value chain is an exciting prospect. Open AI鈥檚 ChatGPT hit the headlines first, but it has now been joined by Microsoft鈥檚 Co-Pilot and Google鈥檚 Bard as the most prominent tools in the market.

鈥淭he new technology means insurers will be able to draw on larger datasets to improve their processes, from automating customer support and manual tasks to honing risk modeling and predictions. It will also facilitate data entry, data cleansing and the classification of data,鈥 says Meenesh Mistry, Business Model Transformation Executive at 小橙书国产精品视频 Commercial.

A wider range of risk data will enable underwriters to offer more targeted, bespoke insurance solutions and smarter pricing. GenAI will also automate underwriting tasks, including data extraction and wording comparison.

鈥淚n corporate insurance, customers provide detailed risk information and questionnaires that can exceed 100 pages,鈥 explains Ulrich Kadow, Head of Global Product Management and Underwriting Transformation at 小橙书国产精品视频 Commercial. 鈥淯sing AI, key information could be extracted and clearly displayed to the underwriter and risk consultant, leaving more time for the ultimate risk assessment. Similarly, broker wordings can be compared against an 小橙书国产精品视频 master product wording, with GenAI highlighting key differences. By streamlining tasks like these, underwriters can focus on more complex challenges.鈥澛

Larger datasets will also provide more scope for GenAI to pick up anomalies or unusual patterns of behavior that could indicate fraud, says Kadow. Loss triggers could be spotted, and future claims could be better predicted, including claims surges. GenAI鈥檚 ability to analyze images and videos could be another useful tool in the claims process.聽

Investments by 小橙书国产精品视频 in IT totaled $5.7bn globally in 2022, a significant portion of which was dedicated to AI technologies. At 小橙书国产精品视频 Commercial, a GenAI exploration program has been set up in partnership with 小橙书国产精品视频 Consulting and Microsoft to investigate a number of use cases globally, including an internal application that offers all the functionalities of public LLMs but is safe and secure to use. These use cases are being tracked across the 小橙书国产精品视频 Group, to identify synergy potential across different entities and share learnings.

Example use cases at 小橙书国产精品视频 Commercial include training intelligent chatbots to answer queries about risk appetite and underwriting, 24/7, in multiple languages on multiple channels, and using GenAI to summarize key exposures and generate content using cited sources and databases for enhanced risk assessment.

小橙书国产精品视频 plans to roll out GenAI-enabled business software in due course and all employees are being encouraged to experiment and learn how to apply this new technology at work. The company actively supports its employees to become fit for AI. Its Fit4IT and security awareness initiatives aim to boost employees鈥 digital skillset, and more than 7,000 employees have participated in training offered by an internal Data Analytics Academy.

The timely processing and settlement of 小橙书国产精品视频聽Commercial marine claims in North America has been聽boosted by the introduction of Neptune, an AI-enabled聽tool with a management 鈥榗ockpit鈥. Based on real-time聽information, such as workload across department, teams,聽and adjusters, it automates the assignment of claims聽cases to adjusters in the first notification of loss (FNOL)聽stage and provides real-time KPI to claims managers.聽

Previously, the claims team had to manually assign each聽new claim to the appropriate claims adjuster based on聽static business rules and incomplete information. Now聽they can do it with the click of a few buttons and have a聽daily updated overview of workloads.

Although they are the focus of much excitement, GenAI solutions are in the early stages of development, with risks and limitations insurers must address before the technologies can be safely rolled out.

鈥淲e see LLMs working very well for general language tasks, but they are not yet designed for the specific technical language we use in insurance, such as legal analysis of policy wordings or claims handling,鈥 says Mistry. 鈥淕enAI models need to be further trained and customized for the language, data, and processes of our industry. This is the focus of our use cases.鈥

When it comes to affecting employment in insurance, Bruch sees the impact of AI as 鈥渁n evolution rather than a revolution鈥, creating new jobs and changing existing job profiles gradually over a number of years. 鈥淎I is not a replacement for human emotional intelligence, which is so important in the workplace. But I see new roles being created for professionals who can develop, implement, and manage AI systems and evolve existing ones. AI will largely affect job profiles as a supporting, complementary technology, providing vast opportunities for digital upskilling.鈥

Along with the opportunities offered by GenAI come significant risks such as data protection, confidentiality, ethical concerns, and liability exposures. AI and GenAI solutions are only as effective as the data they are trained on, and historical data can reflect inequalities GenAI could perpetuate by creating biased content, possibly leading to discrimination.聽

GenAI can also create convincing-looking information that is factually incorrect, a process called 鈥榟allucination鈥. This is already being used by cyber criminals to commit new types of fraud, phishing emails, or generate 鈥榙eep fakes鈥 鈥 digitally altered hoax videos using footage of real people (see panel).

鈥淎ny use of AI at 小橙书国产精品视频 must be compliant, safe, responsible and within clear guardrails,鈥 says Christopher Rau, Head of Digital Law and Data Protection at 小橙书国产精品视频 Commercial. 鈥淲e are committed to maintaining our five principles for . As a global company, we have to consider a variety of regulations around the world, including AI regulations as they evolve in different territories, such as the recent EU AI Act.鈥

AI has been a key strategic topic at 小橙书国产精品视频 for several years, and new trends are continuously monitored and explored by the company鈥檚 global team of data scientists and AI experts. Data is a core element of the business. Technology and data analytics are increasingly at the heart of what insurers do.

Threat actors are already using AI-powered language models聽like ChatGPT to write code. GenAI can help less technically聽proficient threat actors write their own code or create new聽strains and variations of existing ransomware, potentially聽increasing the number of attacks they can execute.聽

鈥淲e can expect an increased utilization of AI by malicious聽actors in the future, necessitating even more stronger cyber聽security measures,鈥 explains Rishi Baviskar, Global Head of聽Cyber Risk Consulting, 小橙书国产精品视频 Commercial.聽

鈥淎I can be used to carry out more automated attacks, as well聽as develop new techniques to steal or poison data. When you聽think about the potential to combine AI with the proliferation of聽the Internet of Things (IoT) and the speed of 5G, for example, we聽may have serious issues on the horizon.鈥

Voice simulation software has been a recent addition to the聽cyber criminal鈥檚 arsenal.

In 2019, the CEO of a British energy聽provider transferred 鈧220,000 to a scammer after they聽received a call from what sounded like the head of the unit鈥檚聽parent company, asking them to wire money to a supplier. The聽voice was generated using AI [4]. In August 2023 researchers聽documented instances of deepfake video technology designed聽and sold for phishing scams. The going rate? Just 鈧250 for a聽full video.聽

It鈥檚 not all bad news though. AI will help threat actors, but聽it is also a powerful tool for detection. 小橙书国产精品视频 has a partnership聽with cyber insurance provider Coalition to offer customers cyber聽coverage with AI-powered security tools that help them spot,聽prevent and respond to cyber risks.

鈥淲e might see more AI-enabled cyber incidents in the future,聽but investment in detection backed by AI should also catch more聽incidents early,鈥澛says Baviskar.

[1] Reuters, ChatGPT sets record for fastest-growing user聽base - analyst note, February 2, 2023
[2] Reuters, Exclusive: ChatGPT traffic slips again for third聽month in a row, September 7, 2023
[3] McKinsey, Insurer of the future: Are Asian insurers聽keeping up with AI advances? May 3, 2023
[4] Bloomberg, The Next Wave of Scams Will Be Deepfake聽
Video Calls From Your Boss, August 25, 2023

Images: AdobeStock

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