Trust is Crucial for the Insurance Industry
Insurance is a sector where trust is paramount. Insurers must establish and maintain trust with customers, regulators, and governing bodies to survive in the industry.
As artificial intelligence becomes more prevalent, insurers need to manage this technology effectively. They must ensure that AI usage is governed and data is unbiased. Ethical approaches that comply with privacy regulations are also essential.
Many insurers are already utilizing AI, as indicated by a survey on private passenger auto insurance. Almost 90% of respondents were using or considering the use of AI/machine learning.
Reggie Townsend from SAS emphasizes the importance of building trust in AI from the very beginning.
Focus on AI and Technology Issues
With the increasing use of AI in insurance, boards are changing their approach to IT issues. Senior managers are expected to take ownership of IT issues rather than delegating them to back-office experts.
Due to the risks associated with technology, boards are focusing on addressing bias, control, and trust at a detailed level to maintain customer confidence.
Read more in: AI bias, control and trust: A roadmap for insurance
Risk-Based Approach to GenAI
GenAI has the potential to impact various aspects of the insurance business. Evaluating this technology from a risk management perspective is crucial to anticipate and mitigate potential consequences.
A proactive, risk-based approach will help insurers understand the risks of GenAI, maintain trust with policyholders, and comply with ethical and regulatory standards.
Learn more from: Exploring the risks and opportunities of generative AI for insurance
Value of Novel Data Sources for AI
Insurers are increasingly relying on new data sources like telematics and IoT devices to enhance their risk analyses. Utilizing AI with these data sources requires diligence around data protection and privacy.
Underwriting using telematics provides more accurate risk assessment. Most tier-one carriers are already using it.
Franklin Manchester, SAS Global Insurance Advisor, quoted in Insurance NewsNet
The Role of AI in the Workforce
Insurers need to apply consistent standards to their AI tools and onboard these tools effectively to ensure proper governance. Traditional HR techniques can help manage AI tools and ensure a smooth integration into the company.
Read the article in Carrier Management: Meet Your New Employee: Advanced AI
Embracing GenAI for Innovation
CEOs see the potential value of GenAI for insurers, with many considering it a high priority for accelerating innovation. To capitalize on this opportunity, insurers must quickly embrace GenAI technology after thorough risk assessments.
See how insurers can transform from a focus on indemnification to a focus on prevention
