According to global consultancy Bain & Company, insurance organisations across the globe have a $50 billion financial opportunity from generative AI (GenAI) to harness the technology in ways that could boost their revenues by as much as 20%, as well as cut their costs by up to 15%.
In a new report released by the firm, it reveals that leveraging GenAI in insurance distribution has the potential to yield more than $50 billion in annual economic benefits for companies across the sector.
Bhavi Mehta, global lead of AI in Financial Services at Bain, commented: “For insurers, benefits due to generative AI will come through three routes. 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.”
Moreover, Bain & Company noted that as GenAI permeates insurance company operations, early initiatives are suggesting that the technology will transform distribution in four ways, including:
- Agent productivity: The technology will play a key role in helping agents to navigate and produce content faster, as well as 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.
Meanwhile, Bain’s analysis also highlights several key risk areas emerging from insurers’ developing use of GenAI, these include, hallucination, data provenance, misinformation, toxicity, and intellectual property ownership.
Sean O’Neill, leader of Bain’s global Insurance practice, said: “As with any nascent technology, there will be risks. 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.”
However, with GenAI continuing to develop and evolve further, Bain urges insurers 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, as well as ensuring that delivery teams are cross-functional, and designing an operating model that is adaptable.
