Ensured Modernisation:
The impact of AI on today’s insurance policies
The time is now, but how? where to? The insurance industry, traditionally misperceived as conservative, has entered a new era of technology-driven transformation. With the arrival of digital tools and artificial intelligence (AI), insurance companies are redefining their interaction with customers, improving operating efficiency and personalising their offers. Not only is this change creating a new paradigm in the insurance industry but also opens the door to a multitude of efficiency opportunities such as process optimisation and automation.
The evolution of the use of new technologies, specifically Artificial Intelligence, is noticeable, with a gradual implementation in the past ten years. Long gone are the days when the introduction of GLMs was a groundbreaking concept, more than 20 years ago. Since then, the penetration of increasingly sophisticated analytical methodologies started in the actuarial departments and moved to Customer Management, Marketing, Claims, and other areas. AI now stands out mainly for its ability to process and analyse large volumes of data in real time. This has enabled companies to better understand risks, personalise products, automate claims or policy management, and assess the appropriateness of underwriting policies. In addition, AI has been instrumental in the development of predictive models that improve decision making in a number of areas such as early identification of fraud, which contributes significantly to cost reduction and efficiency gains.
The synergy between AI and the insurance industry becomes even more evident as the services provided and products offered follow a process of continuous improvement. The integration of this technology does not stop at “just” automating and streamlining tasks usually performed by hand. One of the great virtues of AI is to enable insurers to generate unprecedented personalisation of treatment, service and product, thanks to the holistic view that AI can offer with the appropriate training. Similarly, within that same personalisation, it facilitates more effective risk management, resulting in more accurate and fairer policies. Therefore, this technological collaboration will not only benefit companies in the industry in terms of process optimisation and cost reduction but will also offer customers solutions that are better suited to their specific needs.
However, for AI implementation to be truly effective, insurance companies must meet certain requirements. Adopting the technology to follow the trend is not enough; it is crucial to have a clear strategy which includes data integration, an investment in the appropriate technological infrastructure and the development of internal skills. In addition, it is essential to foster a culture of innovation that supports the constant adoption of and adaptation to new technologies. Only then can insurance companies ensure that AI adds real value to their business and their customers.
The confluence of AI and the insurance sector is already ushering in an era where efficiency, personalisation and customer satisfaction go hand in hand. In order to remain competitive, insurance companies will need to embrace these changes, not as a fad, but as an integral part of their long-term business strategy. As indicated above, this adaptation will require not only a significant investment in technology and talent but also a commitment to innovation and continuous learning.
