Other parts of this series:
- AI holds the key as insurers bid to ramp up the customer experience
- AI on a big scale will give insurers a huge competitive edge
- AI performs best when blended with other powerful technologies
- Partnerships are vital to insurers’ big AI ambitions
- Digital Factories accelerate big-scale AI installations
Insurers that roll out AI solutions across their businesses will gain a substantial advantage over their competitors.
Most big insurers have begun experimenting with artificial intelligence (AI) applications. Some have even begun implementing AI solutions. Few, however, have rolled out AI applications at scale across their organizations.
Carriers that succeed in embedding AI throughout their businesses, and along their extended value chains, will gain a substantial lead over their competitors. They’ll not only boost the customer experience they deliver, as I discussed in my previous blog post, but they’ll also improve operating efficiencies and accelerate product development. All these advances are likely to fuel revenue growth and push up profitability.
Our 2019 Technology Vision for Insurance survey found that only six percent of carriers have installed AI across multiple business units. A further 23 percent have introduced AI in one business unit and a similar proportion are piloting intelligent technologies. This rate of adoption is in line with the global average across the 20 industries we surveyed. However, it’s slightly behind the take-up of two other critical technologies – distributed ledgers and extended reality (See illustration).
AXA, Allianz, Zurich, Allstate and Generali are among the big insurers that are deploying AI in many facets of their businesses. Our Digital Innovation Tracker service has identified more than 90 AI projects in the global insurance industry. About a quarter of these projects are taking place in Europe, with a further nine percent located in the UK. North America is home to 40 percent of AI insurance projects and the Asia-Pacific region accounts for 28 percent.
“Around 63 percent of the AI insurance projects begun in the past three years address property and casualty applications.”
Around 63 percent of the AI insurance projects begun in the past three years address property and casualty applications. This is close to twice the proportion that address life insurance. Only five percent of the AI projects are reinsurance solutions.
Data science technologies have attracted the most interest among insurers keen to roll out AI applications. Around 69 percent of insurers committed to AI have invested in these technologies or begun data science pilot projects. Other popular AI technologies include robotic process automation (60 percent), DevOps (52 percent), machine learning (50 percent) and natural language processing (45 percent). Deep learning technologies (27 percent) and neural networks (23 percent) have only attracted modest interest.
The recent EFMA-Accenture Innovation in Insurance awards confirmed these trends. There was a big increase in the number of AI-based smart-automation innovations submitted for this year’s awards. These innovations were often linked to workforce reskilling initiatives and indicated the extensive reach and potential of AI technologies in insurance.
In my next blog post, I’ll discuss how insurers can achieve big improvements in the effectiveness of their AI implementations by combining them with other powerful new technologies. Until then, take some time to read our 2019 Technology Vision for Insurance survey. It contains plenty of valuable insights.