Generative AI will impact all areas of the insurance value chain

Per latest GlobalData estimates, the AI market was valued at $81 billion in 2022, and is expected to achieve a CAGR of more than 35% between 2022 and 2030. Artificial intelligence is reported by executives across all industries (and all FS sub-segments), as likely to drive “significant disruption” next 12-24 months out, and that “significant disruption” has already occurred (within the past 12-24 months). Gen AI, a specific sub-set of AI, is expected to drive even greater disruption. Leading insurers are at the stage of trialling generative AI. It is a buzzword within the industry and incumbents do not want to be seen to be left behind, but are not fully sure how to integrate the technology successfully. Insurtechs have an easier job transitioning to the technology and are already upgrading chatbots. As AI continues to develop it will have a transformative impact on all areas of the insurance value chain. Industry insiders believe that underwriting & risk profile will benefit the most positively though. Generative AI is the next level of the technology and can prove to be even more impactful than what we have seen to date. The expertise that ChatGPT has already shown in conversational platforms suggests it could transform the customer service and claims management areas in the immediate future. The main barrier to entry will be winning the trust of customers. People still prefer human interaction when dealing with important issues such as making claims on an insurance policy. Insurers will need to convince customers that the technology is reliable and easy to use.