The impact of artificial intelligence on the insurance industry

Unlocking the potential of generative AI in the insurance industry

Generative artificial intelligence (GenAI) has gained significant attention and is transforming industries. It can ingest vast amounts of information and determine the contextual relationship between words and data points. Large cloud vendors such as Microsoft, Google, and AWS offer private, secure versions that can better cater to different uses.

The insurance industry is eagerly looking to adopt GenAI to improve business processes and gain valuable insights. However, successful adoption depends on change management practices and data readiness. Insurance companies should focus on building internal tools to foster a productive culture of AI adoption and enhance efficiencies. This includes implementing data governance frameworks, creating analytics-ready data sets, and organizing data effectively across departments.

Currently, many insurance organizations still maintain records on paper that has not been scanned and may not have established protocols in place for data use and compliance. Ensuring proper data management frameworks are in place can provide compliance, improved decision-making capabilities, and better insights.

The adoption of AI requires companies to evaluate the benefits and challenges continuously. As technology evolves, industries must stay current with changes and re-evaluate strategies to achieve the desired results. Adopting AI requires a fundamental shift in business operations and culture, but the potential benefits to the insurance industry are vast.

GenAI in auditing

GenAI has a plethora of uses in audit, from knowledge management and productivity to process flows. It can parse vast amounts of information, create diagrams, and communicate with humans in many ways, making it a valuable tool for auditors.

However, as with any new technology, there are concerns and risks around GenAI. Trust in the technology and responsible practices should be taken into consideration, as GenAI is not a truth machine and requires proper training and usage.

It is crucial for audit firms to weigh the benefits and challenges of GenAI thoughtfully. Although it is free and accessible, innovative uses are emerging rapidly, meaning that constant evaluation is necessary to ensure efficient and effective use of the technology while avoiding any potential misuses.

Ethical concerns surrounding GenAI implementation

AI assistants have the potential to improve efficiency and productivity within daily tasks, streamlining processes across various systems such as Microsoft Office, ServiceNow, and Salesforce. However, ethical and responsible usage concerns persist around bias, accountability, and data integrity.

To alleviate these concerns, tools and proposed regulations are emerging, including trusted AI umbrellas. Recent developments, such as the use of deep fakes, are fueling legislative and regulatory debates focused on accountability around AI usage and providing consumer protection.

The future of AI in the insurance industry is a promising one, but there are crucial steps that businesses need to take before realizing the benefits. Establishing proper frameworks, planning for data usage, and internal adoption will be crucial to take full advantage of the technology's potential.

This information was originally presented at the KPMG 35th Annual Insurance Industry Conference.