Majority of European leaders in the insurance sector expect Generative Artificial Intelligence (GenAI) to significantly affect productivity and change roles; with limited AI knowledge, future regulation, and ethics being leaders’ top concerns, according to EY.
The new EY European Financial Services AI Survey included executives from 24 European insurance firms – including listed firms representing an aggregate market cap of £239.3bn. It
It found that 83% of respondents are bracing for a significant impact to their workforce and operations. It also revealed that over half (58%) of respondents anticipate that up to a quarter of all roles will require AI training or upskilling over the next six to 12 months, with 21% believing it could be as much as half.
However, many firms still lack plans to upskill their workforce. Nearly half of the respondents (42%) said they currently have no plans in place to train their workforce in new and rapidly evolving GenAI technologies, while a further 38% described their plans as being “in their infancy”.
Taking a more focused approach, just 4% of leaders stated that they have training in place for targeted groups and only 17% reported having developed plans in use. Only 21% of respondents believe that their current workforce has the right skills and capabilities to implement GenAI.
The survey also confirmed that many European finance leaders plan to increase capital allocation to GenAI. Over the past six to 12 months, over two-thirds of respondents (67%) said their firm has actively invested in the technology – this compares with 59% of banking respondents.
Looking ahead, sector spending on integrating these technologies is set to rise over the near-term, with 76% of insurance executives planning to increase spending over the next six to 12 months, compared to 78% of banking executives.
Phil Vermeulen, EY EMEIA Financial Services Insurance Leader, commented: “Insurance leaders across Europe are continuing to invest in AI, as they seek to improve operational efficiency, increase productivity, and enhance customer experiences through tech. To realise the full potential of AI, insurance firms must continue to train and upskill their workforce, across all levels.
“GenAI technologies have the power to transform the insurance sector on a number of levels, from enabling more complex calculations and analysis at pace, to automating customer engagement, underwriting and claims processes.”
GenAI is also expected to change the face of graduate and entry-level roles, according to the survey. Over three-quarters (79%) of executives surveyed said they expect new technologies to have a significant impact on the roles and tasks undertaken by those joining the workforce.
To manage the impact, over half (54%) of executives plan to integrate AI training into their graduate programme, while a quarter (25%) are planning a more widespread restructuring of roles and responsibilities across entry level positions. However, another 33% of respondents, however, said they have not taken any action to offset potential knock-on impacts.
The survey also found that the area of expertise most in demand from skilled talent, specifically in reference to AI integration over the next two years, is data science and innovation (the top choice for 50% of executive respondents), followed by information and technology (21%) and operations (17%).
Omar Ali, EY EMEIA Financial Services Managing Partner, said: “After more than three decades of major digital transformation across financial services, the rise of Generative AI is demanding yet another new set of skills for firms.
He added: “It is encouraging to see high levels of forward planning and development of graduate programmes which are focused on building new skills that will be needed to compete both in market and internationally. While Europe’s boardrooms continue to assess the skills, expertise, and ethical considerations required to manage the risks and benefits of GenAI, steps to develop future, junior talent must also remain a priority.”
Finally, participants also expressed a number of concerns around GenAI, with
knowledge, future regulation, and ethics being at the top.
“When asked to consider the top concerns presented by GenAI integration, European insurance leaders were most likely to cite limited understanding and experience of GenAI applications and their impact across the workforce (42%), followed by uncertainty about existing and pending potential regulatory impacts (33%), and managing legacy system modernisation (13%),” the survey stated.
Concerns around the ethics of GenAI are centred on both privacy (cited by 32% of all respondents) as well as transparency and explainability (32%), and the potential for discrimination, bias, and lack of fairness (18%).
According to the survey, to manage potential ethical implications arising from GenAI integration, 29% of respondents claimed they have already put an AI ethics framework in place, equally 29% are in the early stages of development. However, 38% of respondents stated their firm is yet to develop an AI ethics framework.
In terms of accountability, over half (54%) of respondents reported that their firm’s technology team will be responsible for the integration of AI across the business, reporting to the Chief Information Officer (or equivalent position).
While a quarter (25%) of respondents said that operations will be responsible for the integration of AI across the business, and 13% said their firm remains in the process of defining lines of accountability.
Vermeulen concluded: “GenAI technologies are changing operations, processes and customer experiences across the insurance sector, yet concerns around understanding, skills gaps, regulatory impacts and ethics remain prominent.
“Firms operating across multiple jurisdictions may also be considering the commercial and operational impacts of divergent regulatory regimes. Defining how organisations are going to approach, develop and integrate new capabilities across operations is a critical first step to ensuring that firms are well positioned to mitigate risks, while effectively harnessing the benefits afforded by GenAI.”
