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Navigating AI: Advice for the Insurance C-Suite

Expert.ai Team - 5 February 2024

executive guide

When it comes to AI, things are moving fast. Insurers in particular are feeling the pressure and urgency to understand how to move in this new world. They are trying to balance the sense of urgency to move forward quickly with the excitement of opportunity and the need to distinguish between “too good to be true” capabilities and solutions that provide real business value.

Insurance Unplugged takes us behind the scenes to understand exactly how insurers are navigating these forces with host Lisa Wardlaw, an expert insurance digital strategist and evangelist. In season one, Lisa talks to professionals working on the front lines of AI in insurance who are dealing directly with the issues of digitizing, leveraging data, sorting through the challenges of generative AI and managing the considerations for how to stay competitive in this fast-moving landscape.

Inspired by those candid conversations, here are some quotes to inspire your AI strategy for 2024.

Embrace A New Way of Thinking

Insurers cannot wait out the current changes. The technologies and approaches coming online today represent fundamental changes: a whole new way of thinking and addressing things.

Understand that you can’t solve today’s problems with yesterday’s technology or yesterday’s mindset. Being successful, moving ahead in this competitive environment will take a real shift in thinking: a couple of lines about AI in the annual report are not going to cut it.

– Bryan Falchuk, Insurance Evolution Partners

Think About Where to Use AI

Start with the Problem You Need to Solve

Do the groundwork. Where do you have the biggest business problem? Is it in your internal underwriting process or the claim? Does the process take too long, or do you have major risk exposure from a cyber perspective or from customer engagement. Do you have a low customer experience rating? Are you losing profit from premiums? There is a reason for that. Perhaps you can automate that process, have AI do more fraud detection, initially, and then pass it to the real agent to prevent fraud.

– Helen Yu, Tigon Advisory Corporation

What Will Be Game Changing?

Outpacing the competition will require insurers to prioritize the right goals and the right use cases. Writing faster, organizing documents better are good, but not game changing. So, think about what would be game changing. Using AI for risk selection and pricing, identifying issues in claims before they become claims—that’s game changing. Taking the generation-creation capabilities of AI to learn from documents, decisions and reports and applying that to underwriting, product design—that’s game changing.

– Bryan Falchuk, Insurance Evolution Partners

Target Key AI Use Cases

Make sure you’re using AI to support these functions:

1) Automation: One of the main benefits that AI addresses is to further automation, especially when you have repetitive knowledge, task or processes.

2) Enable decision making support: Given all of the data that insurers have access to, AI plays a key role in generating powerful insight to augment decision making. Insurers should be using AI to make all of your unstructured data available for decision making processes.

3) Disruption and innovation: With the resources and processing power at our fingertips, insurers should be leveraging data and AI to disrupt outdated processes.

– Yannick Even, Swiss Re

Incorporate AI Literacy in Your Culture and Strategy

Make Sure Your Culture is Ready for Change

AI is going to create change within an organization. Organizations must prepare for those changes on a cultural level and really understand how to implement AI and make the part of the culture. You can hire data scientists. You can bring in third party organizations to help refine your data and to set up your governance group. But if your organization is not ready for the innovation and the change that’s going to impact them directly, it’s going to be a challenge. Having a specific, dedicated effort for education throughout the organization is key to ensure that your people understand what’s going on, how adoption will work and how it will influence your value proposition.

– Louis DiModugno, Data Curiosity

Share Your Vision

Literacy’ is when you’re able to be conversational. You don’t have to be fluent, but you have to be conversational.

To be able to really “see” the vision moving forward, people have to understand what’s actually possible from a technological perspective. And they have to understand what tools are potentially at their disposal to be able to influence some of those things. I talk about it as “the art of the possible.” The art of the possible is driven by digital literacy, and you can’t get to this visioning standpoint where you’re looking at where you can take your company unless everybody has that understanding.

– Emma Roloff, Roloff Consulting

The Big Picture

Data Credibility is Key

It always comes back to the data and to the truthfulness of the input. If you’re using ChatGPT and large language models, you will have some real challenges in terms of identifying the source of your data. Did the answer come from my proprietary information, or did it come from a novel that was written 30 years ago? This is a valid question that will become even more important over time.

– Louis DiModugno, Data Curiosity

Be Intentional About Vendor Selection

The practitioners who have been doing this a long time think very carefully about bias and governance. Every practitioner I know that uses generative AI in their daily world knows about things like hallucinations, and they think about validation.

When we think about evaluating vendors or even solutions for our clients, we think almost exclusively about governance and bias because it’s incredibly important, but it’s something you can’t see. You can see a screen and you can have one of these solutions generate a nice poem for you, but bias is very hard to see. It’s very hard to detect. I worry that the casual user or even the casual InsureTech or FinTech won’t be doing adequate work around rooting out bias around governance.

For companies evaluating these technologies: as you’re looking at your vendor ecosystem, do it with intent. If someone says, “I have AI,” you need to know what it’s doing. You need to be aware of the underlying calculation and how you’ve gotten to your conclusions.

– Steven Abel, Oliver Wyman

Incorporate an Ecosystem Mindset

Remember, you are part of an ecosystem—don’t try to build all by yourself. Find a way to provide value to your tech and to your partners. There is value you can bring with your expertise to governments, to a regulator around responsible AI and different framework. So, find a way to bring this value so that these players want to open the doors and help you build something at scale.

– Yannick Even, Swiss Re

Listen to Insurance Unplugged

Join host Lisa Wardlaw for this expert.ai-sponsored series of candid conversations with industry leaders about the world of insurance. New episodes drop every Wednesday! Subscribe or click to listen in!

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