The evolution and acceleration of AI technologies over the past year has us all thinking toward the future and all of the ways that AI is transforming how we do business.
For insurance companies, this transformation is not only happening in processes like underwriting and claims handling, but along the entire continuum of the customer experience, and beyond.
On the Insurance Unplugged podcast, Lisa Wardlaw is talking with industry leaders about the ways insurers are dealing with these changes, from the strategic to the practical. In a recent episode, Lisa talked to an industry professional with more than 30 years of experience working with data, mostly in the insurance industry. James Sizemore is the chief general strategist for insurance at Informatica, where he leads the development and delivery of Informatica’s global go-to-market for the industry.
In their conversation, James talks about how generational changes are impacting the industry, the role of AI and how AI is impacting everyone from the cubicle up. Here are a few highlights from the episode.
The Impact of Generational Change
According to Sizemore, “The entire industry is experiencing generational change right now, and this requires carriers to strike the right balance between providing the comfort of consistency to their legacy customers while figuring out how to innovate to attract and retain new customers.” For example, a 25-year-old customer will have different expectations than an 85-year-old customer.
This is just one reason that companies are turning to AI. Here, carriers are looking to AI to deliver an omnichannel customer experience, to foster engagements that appeal to younger, more demanding, less brand loyal customers, engagements that turn the customer experience itself into a competitive event. Here, one advantage of AI is that it can go beyond a simple journey or persona map and take a hyper-personalized approach.
Insurance AI Use Cases
While pipeline pressure is high in insurance, there are opportunities to add value with AI across the insurance value chain.
The fundamental basic premise is this: Insurance is data intensive. Today’s insurance carriers need data management capabilities that are robust enough to match that intensity, and AI is the next evolutionary step forward in advancing those capabilities.
In terms of AI and what we should expect, Sizemore expects to see continued and widespread adoption and application, particularly as carriers continue to uncover AI use cases across the insurance value chain.
What are some of those use cases?
Like any other company, Sizemore says, insurers want three things: to make money, to spend less and to keep customers happy. And, for the most part, the insurance AI use cases that companies are pursuing reflect those business imperatives.
For example, underwriting automation uses AI to improve underwriting STP (straight through processing) by streamlining the analysis of publicly available or third-party data sets and automatically generate risk predictions and insights.
Another use case is around STP for claims where generative AI records and responds to the first notice of loss and then maybe gives the customer real-time information on triage and repair services and just sort of generally improves the entire customer claims experience.
These are real use cases that are happening, especially at the more sophisticated carriers.
An Industry Call to Action
Sizemore has two pieces of advice, one for the insurance industry and one for emerging professionals.
“For the industry, it’s important to remember that generational change isn’t just happening in the customer base. It’s happening in the cubicles too. The U.S. Bureau of Labor Statistics says that nearly 400,000 employees are expected to retire from the industry in the next few years. And that’s a problem because there’s nobody waiting in the queue to replace them. A higher percentage of millennials have put off buying large insurable items like houses and cars than any previous generation, and therefore they have less exposure to insurance. I just read a survey from The Institutes that reported that 80% of millennials report having little or no understanding of what insurance is and almost no awareness of employment opportunities in the industry.
To tie it back to AI, investments in digital transformation and AI makes sense, not only because they mirror the value of upskilling today’s employees, but they lay the business and technology foundations that carriers will need to attract and retain tomorrow’s talent.”
“My second piece is to my son and to this younger generation: if you’re an emerging professional, don’t sleep on insurance. Insurance matters. In fact, insurance matters so much that it’s no exaggeration to say that modern commerce and even society might grind to a halt if we didn’t have insurance.
Insurance has underwritten our lives, livelihoods and lifestyles since ancient times. But today, our lives and lifestyles, our livelihoods move faster than ever before. Carriers know they have to keep up, and they’re willing to pay for people who have the energy, the drive, the desire, the talent, the imagination to help them keep up. Young professionals, people like you, go get a career in insurance.”
Conclusion
From streamlining underwriting processes to enhancing claims management, AI presents tangible opportunities for efficiency gains across the insurance value chain. However, the present moment is a pivotal one for insurance companies. Generational shifts and technological advancements are converging, and both of these forces demand strategic action. Embracing AI and nurturing a new generation of insurance professionals will be essential for long-term success in an increasingly competitive landscape.
Listen to the full episode on Insurance Unplugged.
