Other parts of this series:
Insurers looking to reap the big benefits offered by artificial intelligence should quickly implement these technologies across their organizations.
Insurance providers are fast recognizing the huge potential of artificial intelligence (AI). They’re deploying intelligent solutions in many parts of their businesses. Claims management, underwriting, sales and the customer experience are among their key AI applications.
Our research shows that around 80 percent of insurers believe AI will revolutionize how they gather information and interact with customers. About 75 percent of carriers plan to use AI to automate tasks to a large or very large extent in the next three years.
Big investments in AI could give insurers substantial returns. In North America, for example, we estimate that investments in a broad range of intelligent solutions could increase the annual profitability of insurers by as much as 20 percent, yielding an additional US$20 billion a year.
“What’s causing the AI deployment gap?”
However, only a few insurers are currently enjoying significant returns on their AI investments. Close to half of those we surveyed are still planning or piloting their intelligent solutions. This cautious approach to AI is not restricted to the insurance industry. Our study of 1 100 executives in major industries across the globe reveals that only 45 percent of big companies have sustainable AI programs that are delivering the benefits expected of them.
Despite their enthusiasm for AI, most companies’ investments in technologies such as robotic process automation, natural language processing, expert systems and machine learning have yet to generate significant improvements in earnings. While the majority of firms recognize the importance of AI, many of them seem to be holding back on deploying these technologies.
What’s causing this AI deployment gap? Often firms cite insufficient or inappropriate data, lack of skills and expertise, or concerns about the complexities of AI. Beyond these obstacles, however, there’s a bigger reason. Many companies acknowledge the importance of AI but neglect to make it a core component of their business strategies. They’ve installed AI systems in isolated applications or within discrete silos. Such an approach will only produce modest returns. What’s worse, applying AI in a fragmented fashion will most likely result in corporate paralysis, allowing competitors that are bolder and more proactive to outpace them.
To achieve the huge potential benefits of AI, companies should implement these technologies at scale. AI needs to be at the heart of their business strategies. It ought to be a critical “enabler” that drives improvements in efficiencies across the organization, enhances the customer experience, opens new markets and creates additional revenue streams.
Momentum matters. Traditional “toe-in-the-water” approaches to implementing new technologies no longer work. What’s required is Applied Intelligence: the rapid incremental deployment of AI across the organization to build a sustainable competitive advantage.
In my next blog post, I’ll discuss how some insurers are outpacing their competitors and are already reaping healthy returns from their AI investments. Until then, have a look at these links. I think you’ll find them useful.