Armonk, New York, United States – 16th October 2024 – New research done by IBM’s Institute for Business Value, focused on the generative AI adoption gap in the insurance industry, reveals a gaping mismatch. Insurance leaders prioritize enhancing customer experience using Gen AI, while customers seek more personalized risk solutions and actionable insights.
The report surveyed 1,000 C-suite insurance executives and 4,700 customers across the globe. The findings were outlined in the report, titled “Generative AI in the Insurance Industry: You Can’t Win if You Don’t Play.”
The report says that generative AI offers potential opportunities, but C-suite executives must see the risks involved. This was reflected in one key finding, that showed 49% of executives viewed Gen AI as a risk, although a similar 51% saw it as an opportunity. Of the 1000 executives surveyed, 77% acknowledged that AI was critical to staying competitive.
Moreover, the report found that merely 29% of customers were comfortable interacting with AI-powered agents. The lack of trust in Gen AI was also reflected in another finding, stating that only 26% of consumers trust the reliability and accuracy of insights generated by Gen AI.
Although consumers show reservations about Gen AI, insurance leaders are expected to continue building Gen AI solutions. Investments in the insurance industry are expected to increase by over 300% between 2023 and 2025, with organizations transitioning from pilot programs to enterprise-wide Gen AI implementations.
To address the mismatch in Gen AI priorities, the IBM report listed recommendations for insurance leaders and executives. These include developing more flexible, risk-based AI products that align with customer needs. Moreover, insurance leaders must implement AI governance frameworks to enhance customer trust and address technical challenges in offering data insights to customers.
While generative AI holds significant potential for the industry, insurance leaders must align their priorities with customer demands. The adoption of ethical Gen AI practices can be a win-win, according to Mark McLaughlin, Director of Global Insurance with IBM Technology, who said,
“There are also significant opportunities in connecting customers to the right products. Leveraging AI across the enterprise will be critical to improve both customer risk experiences and to implement the underlying IT tools that power those experiences.”
What is your reaction?
