Introduction
It’s nearly impossible to go a day without hearing about the opportunities and consequences of using generative artificial intelligence — and rightly so. Generative AI can not only repurpose or optimize existing data and processes but also quickly create new and creative outcomes for any individual or business, regardless of technical knowledge. It’s no surprise that generative AI can have a significant impact on the insurance industry.
Opportunities Provided by Generative AI
Today, many businesses are using generative AI in cases such as generating dialogues for virtual assistants, automatically creating code, marketing content, and more. This convergence of technologies across different industries allows organizations to leverage achievements from other sectors and improve time-to-market. The insurance industry, in turn, has unique opportunities to create value in vertical areas that require deep knowledge and contextual understanding. These opportunities require fine-tuning existing models or creating specialized models for specific purposes. A real breakthrough for the insurance industry will be the integration of various use cases of generative AI to create a seamless, integrated solution.
Creating Value Through Investment in Generative AI
Insurance organizations have a unique opportunity to create significant value by making well-justified investments in three key areas:
- Profitability and Growth. Strategic investments can help insurers identify new growth opportunities, improve product offerings, and expand the market, ultimately leading to increased profits.
- Cost Savings and Efficiency. By investing in AI solutions for content creation for low-risk cases, insurers can reduce costs in functional areas, enabling more efficient resource allocation and saving money.
- Operational Efficiency and Intelligence. Using generative AI for automatic coding accelerates the software development cycle, which boosts productivity and reduces training time.
Risks and Regulatory Aspects
While the opportunities and value of generative AI are impressive, it also brings risks to the insurance industry. Industry leaders should consider the following when scaling:
- Harmful Hallucinations and Fake Data. Generative AI can create security threats through fake data.
- Bias and Discrimination. AI can replicate and propagate discriminatory behavior models.
- Regulatory Compliance and Privacy. AI models need to comply with regulations and track data sources.
- Loss of Human Contact. Excessive automation can lead to the loss of empathy and human interaction, which can reduce customer satisfaction.
Mitigating Challenges and Next Steps
To minimize risks, insurance companies must develop ethical AI, use diverse data for training models, and continually assess their AI systems through a robust management framework.