As generative AI continues to evolve, Bain urges insurance companies to take several critical steps to adapt to the fast-developing technology.
Insurance businesses worldwide have a $50 billion dollar financial opportunity from generative AI to harness the technology in ways that could boost their revenues by as much as 20% and cut their costs by up to 15%, research from Bain & Company released today finds.
Bain’s report, It’s for Real: Generative AI Takes Hold in Insurance Distribution, concludes that leveraging generative AI in insurance distribution has the potential to yield more than $50 billion in annual economic benefits for companies in the sector.
“For insurers, benefits due to generative AI will come through three routes,” said Bhavi Mehta, global lead of AI in Financial Services at Bain. “This includes raising productivity, lifting sales through more effective agents and digital advice, and better risk identification and targeting that will help both customers, agents and the enterprise. At Bain, we remain committed to helping our clients not only within insurance ‒ but across industries ‒ identify and realize AI’s full business potential.”
Read More about Fintech : Gamification in Fintech: All About Customer Retention and Engagement
Generative AI will transform insurance distribution in four ways
Early use of generative AI within insurance suggests the technology will transform distribution in four ways, including:
- Agent productivity: The technology will help agents to navigate and produce content faster. It will reduce low-value interactions and provide coaching for more effective interactions with customers.
- Customer self-service and sales support: An always-on virtual assistant will extend the availability of agents and help customers with product comparisons and digital purchases.
- Hyper-personalization at scale: Tailored conversations, content, and offers will more readily respond to individual customer needs.
- Business insights and decisions: Combining signals from unstructured data with structured data will yield new insights and aid in risk identification.
Managing the risks
Bain’s analysis also pinpoints key risk areas emerging from insurers’ developing use of generative AI including hallucination, data provenance, misinformation, toxicity, and intellectual property ownership.
“As with any nascent technology, there will be risks,” said Sean O’Neill, leader of Bain’s global Insurance practice. “To manage risks, insurers should adopt a responsible AI strategy that includes short-term priorities, as well as a long-term vision enabling companies to build valuable AI capabilities to redefine their business operations.”
Critical steps for insurance business leaders
As generative AI continues to evolve, Bain urges insurance companies to take several critical steps to adapt to the fast-developing technology. These include aligning across business units on how AI can support business strategy, determining what to build internally and what to buy from vendors, ensuring that delivery teams are cross-functional, and designing an operating model that is adaptable.
Latest Fintech Insights :Fintech Trends 2024: How Can Enterprises Be Better Prepared?
[To share your insights with us, please write to pghosh@itechseries.com ]
