AI insurance technology appeals to execs but not underwriters

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The industry – like many others – is looking at artificial intelligence and machine learning

While the industry is very aware of new insurance technology such as artificial intelligence and machine learning to improve, not everyone is ready to take it on as a part of their workday.

Execs are more enthusiastic about AI than underwriters

Executives see the potential in the benefits of insurance technology that includes artificial intelligence and machine learning when introduced into workflows. That said, less than half (43 percent) of underwriters have the same opinion about AI automation of this type, said a recent World Property and Casualty Report 2024 published by the Capgemini Research Institute.

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Among execs, a substantially higher 62 percent saw AI and machine learning as a tool to elevate the quality of underwriting while also reducing fraud

The underwriters themselves had their doubts about certain parts of this tech, particularly when it comes to overcomplexity and data integrity concerns. This was enough to make them hesitant to proceed with the tech’s implementation.

Involving underwriters in discussions could encourage insurance technology adoption

The report recommended engaging underwriters in early discussions to encourage adoption and to show how the models are transparent and explainable. They indicated that the earlier this happens, the more effective it will be.

“Today’s insurer is operating in one of the most precarious environments in recent memory,” said Capgemini global insurance industry leader Adam Denninger in a prepared statement. “The industry must react to this volatility by rethinking the underwriting rule book. It requires shifting away from legacy models by modernizing core systems and deploying advanced technologies that drive better outcomes and transparency.

“Embracing AI-driven insights and automation is crucial for the industry to drive a competitive path towards underwriting profitability that adapts to evolving risk dynamics and policyholder behaviors,” Denninger added.

Survey says…

The Capgemini report included data from its 2024 Global Insurance Underwriters’ Survey, as well as the 2024 Global Voice of the Customer Survey, and the 2024 Global Insurance Executives’ Survey.

It showed that while execs are seeking to use insurance technology for more productive workflow models, underwriters indicate that the data environment simply isn’t there yet.

While 83 percent of execs felt the predictive models were critical for underwriting, only 27 percent said that their companies had the necessary capabilities for implementation.

Among underwriters, 49 percent said that drone footage data was beneficial, but that few carriers had the insurance technology necessary to analyze those images. About half of underwriters would like to use connected devices for real-time data use, but only 12 percent of insurers have the necessary tech in place.

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