Insurance companies are investing heavily in AI across the board. They are updating their tech stacks for the cloud, establishing data lakes, and experimenting with analytics that are intended to prevent, forecast, and customize. And it is kind of paying off.
That figure is predicted to quadruple by 2024. More encouraging still? According to more than half of insurers, their AI investments have performed better than anticipated. Only 3% feel undervalued.
The catch is that, despite all of this investment and hope, not a single insurance firm we looked at has achieved “AI Achiever” status, which is a point at which AI is deeply ingrained in the company and enables intelligent decision-making as well as enterprise-wide reinvention.
Rather than jumping in, the majority of insurers are still testing the waters. They are paying a price for their hesitation. When artificial intelligence is integrated into a company’s operations, its true potential is shown.
How can insurers become AI achievers, then? Let us begin in the front office, where change is most important.
1.Using AI to rewire customer experience (beyond chatbots and FAQs)
For a long time, the insurance customer journey has been a convoluted web of paperwork, phone conversations, and disjointed touchpoints. A few insurers have advanced. A 360-degree view of a client is now available to many, including information on their policies, the date of their most recent claim, and whether they have been considering a new quote.
However, understanding is not the same as knowing.
The majority of insurers still have trouble making the connections between these exchanges. Few possess the means to identify the breakdown points in the voyage, let alone make repairs. Even while CRM systems are already standard, very few carriers are using AI to make the data come to life.
The chance? artificial intelligence (AI)-powered orchestration—using real-time data to provide personalized and intuitive journeys across all channels, from quotation to claim. Consider it more like a dance than a funnel: sensitive, flowing, and shockingly human.
One particularly underutilized treasure is conversational AI. Too many insurers answer frequently asked questions or divert calls using bots. However, the pioneers? In an increasingly competitive labor market, they are creating self-contained conversational journeys that genuinely address issues, leading to happier clients and reduced service expenses.
2.Rethinking Products for a World Focused on Life
“Customer-centricity” has always been a topic of discussion among insurers. The majority of it, however, is merely glorified segmentation. And clients? They are now different. Fast.
People demand safety, not just policy, in a world that has been altered by inflation, climate anxiety, and the precarious gig economy. They want their insurer to be aware of the convoluted and uncertain course of their lives.
AI excels in this situation.
AI can give insurers dynamic, real-time insights on their clients’ lifestyles, risks, and potential future needs, moving them beyond static identities. AI can identify if a customer recently purchased a bike, acquired a puppy, or relocated to a flood-prone area—and modify coverage appropriately—instead of considering them as “a homeowner with two kids.”
This is not a theory. Usage-based auto insurance that adapts to driving behavior is currently available. Hyper-personalized, context-aware insurance solutions are becoming possible as wearables, sensors, and smart devices proliferate.
IoT-connected factory floors are a compelling example of how AI is being used to stop accidents before they happen. This includes showing risks through AR glasses, stopping machines as workers pass by, and sending out maintenance notifications. This is proactive, compassionate protection, not merely improved risk management.
For a long time, insurance sales and marketing have remained formulaic. However, AI has the ability to transform them into something much more accurate and customized.
Suppose a client visits your website. Before a human is involved, AI can quickly determine their goal, present a customized product, provide an estimate, and respond to inquiries. AI provides the agent with the appropriate information, the appropriate offer, and even in-the-moment coaching advice if the customer does wish to speak with someone.
It is already taking place.
Consider Tapoly, a microbusiness and freelancer insurance provider with headquarters in the UK. Every client interaction now incorporates AI, which is used to price risk, personalize products, and react instantly.
For example, Sompo delivered proactive sales coaching in collaboration with AI CRM platform Vymo, effectively providing its representatives with a digital co-pilot that enables them to close more deals and provide better customer service.
Developing into an AI Expert: Five Crucial Elements for Insurers
There are no proof-of-concepts or pilots along the way to AI maturity. It requires dedication. What makes Achievers unique is this:
Executive sponsorship is ubiquitous. Leadership must evangelize AI, not just support it. Every team, including HR and underwriting, should be aware of how AI enhances the significance of their work.
Talent is superior to tools. The key lies not only in employing data scientists but also in creating diverse teams that question presumptions and take a novel approach to issues.
The core of AI. Industrializing AI—integrating it into procedures, systems, and culture—is necessary for true scale. Consider reproducibility rather than innovation.
AI that is responsible from the beginning. Just 35% of consumers have faith in the application of AI. Transparency, equity, and governance must be ingrained from the beginning by insurers to avoid losing the confidence they have worked so hard to earn.
The Bottom Line
AI is the present, not the future, of insurance. However, there is a gap between experimenting with AI and creating a business that uses it. The companies that close that gap will beat their rivals not by changing rates but by making the whole insurance process faster, smarter, and much more human.
