The insurance industry could benefit greatly from AI-based services. To date, however, this potential for increased efficiency has not been fully exploited, according to a BearingPoint survey of 100 insurance industry experts. Management consulting offers insight into trends and pitfalls of further development.
00 experts from 25 different insurers were interviewed by management and technology consultancy BearingPoint about the use of artificial intelligence. The results paint an updated picture of the industry’s level of maturity regarding AI-supported services. The conclusion of the survey: the industry is largely behind in terms of technical possibilities, for now. There are signs that AI should be used more. But many projects are still in the early stages. The consultants provide perspective on the trends that are emerging for the near future and what IT departments need to be prepared for.
Most still don’t trust AI
The survey shows the growing operational importance of AI services. The benefits of AI-supported services are also indisputable among insurance experts. In practice, however, a different picture emerges: 60 percent of companies surveyed said they currently do not have an AI application area. On the contrary, this means that the penetration of specialized processes in insurance companies is still in its infancy.
The first steps towards the use of AI are often first tested in laboratory conditions. One of the biggest influencing factors is where AI skills can be found in the company. In addition to the use of AI in “Information Services” (14 percent), the areas of “Operating Services” (10 percent) and “Sales and Services” as well as “Channels” (8 percent each) also play a role. An important paper.
In insurance companies, there is a great need to act to develop AI skills in specialized departments, but also in the IT organization. This applies in particular to the practical implementation and use of AI-enabled services in specialized processes and IT integration for the application landscape and IT infrastructure.”
Matthias Höhne, Global Head of Insurance at BearingPoint
The gaps that currently exist mean that in many cases the department is unable to recognize the potential to use AI services. For example, 43 percent of respondents said unclear technical delineation or definition of the use case was a challenge.
Availability of problem case data
The BearingPoint expert also emphasizes that the use of AI services increases the qualitative and quantitative requirements for data provision. Höhne expects a particularly high growth potential in the area of operational services, because here the use of artificial intelligence in process automation opens up great potential for efficiency.
Until now, 70 percent of insurance companies have only used their own data to set up AI services. However, the data available to date is qualitatively and quantitatively inadequate, according to 42 percent of those surveyed. On the one hand, BearingPoint recommends collecting the required databases before using AI and making them available with sufficient structural and content quality. When your own data is not enough, external data should be purchased to close the data or information gaps and thus advance the development of AI services.
Potential High Efficiency Gains
Most of the companies surveyed, which already use artificial intelligence productively, confirm a measurable benefit. 60 percent say that service efficiency has increased between 10 and 50 percent through AI. Another 10 percent of the insurance companies surveyed indicated an increase in service efficiency of 50 to 75 percent and even more than 100 percent.
BearingPoint sees significant efficiency and performance potential for AI-supported business processes, especially in the area of process automation. This was demonstrated by the present results. The consultants also expect the user pool, which is currently very manageable, to grow rapidly due to the increasing penetration of specialized processes. Technical developments will also contribute to this.
The current high proportion of self-development will need to be complemented by a significant proportion of ‘buy/rent’ services in the medium term. Therefore, AI services are also following the trend towards standardization and will soon be fully integrated as key components in automated processing.”
Thorsten Vogel, BearingPoint Insurance Partner
However, the study also shows the high pressure to act on the insurance industry. Vogel warned that insurers must act now and develop a strategy for the acquisition or development and productive use of artificial intelligence.
BearingPoint provides the details of the survey, forecasts, and recommendations for action based on it in its free white paper “Integrating AI in Insurance Companies.” available. hj