Throughout the “AI in Insurance” session, it became clear that the future of the insurance industry will revolve around increasing organizational agility by putting AI front and center. Digital transformation is becoming imperative to achieving market leadership and facilitating an innovation-focused culture. AI is becoming an essential part of that transformation.
2020, a strenuous year for all industries, was a pivotal one for the insurance industry.
2020 forced the insurance industry to reckon with its ability to meet the rapidly evolving needs of customers, partners, and employees. McKinsey, for instance, pointed out in a 2020 report that “Insurers that have developed mature digital functions in sales and distribution, service and retention, and claims are well-positioned to weather the crisis—and those that haven’t must act fast to catch up.”
This reckoning revealed that digital transformation was not only necessary to survive the crisis, but necessary to thrive moving forward.
From 2021 on, AI and automation—centerpieces to enterprise digital transformation—are going to be high priorities for forward-thinking insurance companies.
The future of insurance is going to be open, connected, and automated.
Guest panelist Ellen Carney, Principal Analyst, Forrester Research
In contrast to other industries where technology budgets tend to be decreasing, insurance technology budgets are increasing, explained Carney on the panel. According to Carney, citing Forrester research findings, a 1.4% increase in insurance company technology budgets will accelerate the future of work and the future of the customer experience.
It’s important to note that much of this budget increase isn’t just going to maintenance. Carney shared that 33% of this budget is going to new projects.
Holly Olive (Digital Operations, Insurance Consulting Lead at Cognizant at time of the panel) agreed and warned that as budgets shift, momentum will increase, and laggard companies might be left behind: “The train is moving, and you want to be on it.”
The future of insurance, however, will depend not just on companies’ willingness to adopt AI but their ability to pursue, adopt, and implement business solutions that leverage AI.
Skepticism around AI occurs because in many industries, technology hasn’t kept up with the promises of its marketing. AI and ML have become marketing buzzwords in many circles. Companies with products that offer simple, rules-based automation are often willing to claim their products are intelligent when they aren’t. Those products can still be useful, but they aren’t delivering the impact that true AI-based solutions can provide.
Where hype meets reality, according to keynote speaker Craig Le Clair, Principal Analyst at Forrester, is in platforms that enable focused horizontal and vertical use cases. Le Clair explained during the AI Summit keynote that while AI used to be a separate tool, it will now become part of almost all technologies: “AI will seep into applications and become a normal way of doing business.”
The future of AI won’t be adopting a fancy tool and letting it lead you in the right direction; it will be developing a smart business strategy that leverages the advantages of AI.