As AI technology continues to progress further, especially with the rise in Generative AI (GenAI), organisations across the re/insurance sector are experimenting more with the technology and finding new ways to apply it into their workforce.
Reinsurance giant Swiss Re’s CEO, P&C Re, Urs Baertschi, recently stated that it feels like the industry is at the peak of the hype cycle right now when it comes to GenAI.
During a recent discussion with Alison Martin, CEO EMEA and Bank Distribution at Zurich Insurance Group, and Philip Vermeulen, EMEIA Financial Services Insurance Leader at EY, Baertschi explained that Swiss Re sees the implementation of GenAI in two categories.
He said: “The first one is automation and this is about how we can replace something that exists today with a technology. The second one is about augmentation. How do we do certain things better, faster, cheaper, and probably there will be more in the second category where we see most of the applications for our industry.”
However, despite GenAI presenting many opportunities for the re/insurance sector, Baertschi highlights how the technology also comes with a number of threats to consider too.
“The bad things that we’re going to get is in fraud, deep fakes, false positives, false negatives, and they are going to get a lot better. A big part around the industry’s focus around GenAI also has to be on defence, not just playing offence.”
Switching things now towards underwriting, Baertschi notes that the technology has the potential to allow organisations to provide cover to more people across the globe in ways that the industry has not been able to do before.
However, looking again towards the negative factors of GenAI, Baertschi warns that applying this technology could introduce bias and ultimately increase exclusion rather than shrinking the protection gap.
“On the underwriting writing side we’re really going to have to think this through and balance both the positive aspects of it where we can reach more people and insure and protect more people, versus maybe the unintended consequences,” he said.
Moving towards Zurich, Martin explains how the organisation balances the risks that surround AI.
“We think of AI as a fantastic opportunity but we are very cognizant of the risk it poses. Five years ago, we introduced our AI assurance framework, which really is looking at how do we risk manage the use of it internally, which essentially means you always have to have a human in the loop, and we are very reticent about touching our customers with artificial intelligence.”
She continued: “There are lots of fantastic ways that AI can support agents to give customers better advice, and we can look at giving more risk insights. However, having AI speak to our customers, we are very, very nervous about that.
“When we think about use cases for AI, one of the things we think about is what’s the potential for negative consequences to our customers, and it’s a very high bar that any technology would have to get over for us to put it in front of our customers.”
