Abbey Compton and I discuss the changing relationship between insurance and generative AI with Daria Lee Sharman in this edition of Insurance News Analysis. Our starting point is her most recent article, “7 Challenges the Insurance Industry is Facing with Generative AI.” We examine the potential and potential risks of this technology in the areas of underwriting, claims, fraud prevention, and workforce transformation.
An Underwriter Who Is More Human?
Making underwriting more human, not less, is one of the more fascinating promises of generative AI. Given that we are discussing machines that are capable of producing data and creating words, that may seem counterintuitive. But what if that device could give underwriters a deeper understanding of their clients—not just their policy numbers?
That is what is showing up. By sifting through vast amounts of data, generative AI may provide personalized narratives and insights, providing human underwriters with more insightful information and more sophisticated tools. Making more sympathetic conclusions is equally as important as making them more quickly. According to Daria, this type of augmentation may ultimately realize the long-held goal of hyper-individualized underwriting. And maybe in the process, provide the work a greater sense of purpose for those who perform it.
Additionally, the scammers are changing.
The problem is that this technology has two sides. Claimants, whether sincere or not, have the same power that enables insurers to create complex, customer-specific experiences.
As we go into a new era, false assertions may become more complex, emotionally appealing, and difficult to tell apart from the truth.
Insurers now have the challenge of staying ahead of the curve without offending the people they are attempting to protect.
It will be crucial to have control, guardrails, and claims experts who understand AI. However, those alone will not be sufficient. There are significant financial and reputational stakes in this arms race.
Beyond the Buzzwords: Innovation
Innovation is essential as claim volumes increase and the system is under increasing strain from societal changes, economic volatility, and climate catastrophes. However, not all forms of innovation are digital.
Take Florida’s “insurance villages,” which are temporary settlements created to handle the massive volume of claims following Hurricane Ian. These practical solutions demonstrate the continued effectiveness of traditional logistics when paired with innovative ideas. Or consider the recently established Insurance Collaboration to Save Lives, which seeks to use data and technology to lower chronic mortality rates even as COVID-19’s impact diminishes.
It serves as a reminder that although generative AI may make news, it is only one piece of a much bigger toolkit. The messy, human business of cooperation, trust, and perseverance will shape the future of insurance, not just code.
Concluding Remarks: Possibility accompanied with Uncertainty
AI generative is amazing. It offers transformation, insight, and efficiency. However, it also adds ethical and technical complexity. The insurance sector must decide whether to bravely and intentionally adopt this technology or risk falling behind in terms of both innovation and exploitation.Where, how, and why are the questions. And if they will keep in mind that service, not scale or speed, is the ultimate objective.
