Other parts of this series:
AI is most effective when organizations use it to do something new.
Smart organizations recognize that artificial intelligence (AI) is not just a technology but a collection of powerful, often diverse, technologies. Exceptional organizations, however, realize that AI is something more. It’s a transformative capability.
When this transformative capability is harnessed within a company’s business strategy, it has the power to change the whole organization and deliver outstanding financial returns. Our research shows that companies that fully understand AI and build it into the foundations of their operating models secure a significant competitive advantage. They boost the business value of their organizations substantially. Firms that introduce AI piecemeal, and create silos of isolated technologies, are likely to lag behind their rivals. The returns on their AI investments will often be disappointing.
Insurance providers, and other organizations, should move swiftly to deploy AI as a driver for growth across their enterprises. As I mentioned in an earlier blog post, insurers need to put AI at the heart of their business strategies, to create lucrative new products and enter promising previously untapped markets.
Senior executives in most industries have high expectations of AI. Our global survey of business leaders identified four key areas where they believe AI will increase value within their organizations during the next three years.
Changing the business model, a move identified by nearly half of the executives, is likely to be critical to the success of most AI implementations. This is because AI is most effective when it’s used to do something new. If a company simply installs an AI solution to improve the performance of a specific business application, its competitors can easily follow. Any early advantage soon evaporates. However, if the company uses AI to innovate and creates, for example, new customer experiences or products, this advantage is difficult to emulate. This second approach might be riskier but it’s likely to yield greater, more enduring, competitive advantage.
Insurers are needlessly limiting themselves if they view AI as only one, or a group of technologies, that could improve their existing business functions. The full potential of AI is unleashed when companies recognize AI as a transformative capability that can strengthen their businesses and create a host of new opportunities.
In my next blog post, I’ll discuss how insurers can overcome the obstacles that often stall their AI plans. Until then, have a look at these links. I’m sure you’ll find them useful.