Beyond the Hype: Xceedance Highlights Top AI Trends for Insurers in 2024
Generative AI moves to the next level and insurers need to test, transform, and integrate to realize benefits
Insurers are prepared for artificial intelligence (AI) to move beyond task automation and machine learning to advanced uses in 2024, according to new insights from Xceedance, a leading global provider of strategic operations support, technology, and data services for insurance organizations. But an intense focus on testing, workflow transformation, customization, and integration are critical for insurers to realize the benefits. The highlights from Xceedance, based on discussions with carriers and MGAs around the world, identifies the challenges and opportunities for insurers of all sizes.
“There will be a significant shift in how insurers approach generative AI in 2024. They’ll be looking to advance the ways they apply it across claims, underwriting, and other insurance processes. At the same time, they will be focused on ways to build trust in the technology, make it more accessible to everyone in the organization, and pinpoint the return on their investments,” explained Arun Balakrishnan, CEO of Xceedance.
Xceedance focused on ways insurers can address four key AI challenges in 2024.
1. There must be significant focus on generative AI testing. Many insurers have been getting great results from machine learning, automating tasks in claims and underwriting. But without taking the next step, they’ll fail to realize the full potential of AI. The challenge is to become comfortable with computers making choices, from level and type of coverage to claims recommendations. To achieve that level of trust, they’re going to have to try and test, again and again. This will flow across business processes and lines of business.
2. Insurance workflows must be reinvented. Most insurance workflows were designed more than 60 years ago. Underwriting questions, the set of questions insurers ask a client before providing a quote or policy, haven’t been changed significantly in decades. Technology raises both challenges and opportunities for companies. Successful insurers will combine technology, data, and AI and revise insurance processes from the ground up.
3. AI will enable insurers to embrace the power of one. Out of necessity, insurance models have historically considered clusters of risks in determining rates and coverage. The ability to quickly analyze large volumes of data is enabling this to change and some insurers are starting to look at risks individually, no matter how small. In some cases, they’re reaching different conclusions, considering business they may not have previously, and identifying new market approaches.
4. Integration of information sources will drive use. Generative AI requires data—a lot of it. The good news is that there is no shortage of data sources available to insurers and more are being created every day, from telematics to geospatial data. The challenge for insurers will be integrating data sources into AI platforms so the information can be used to make decisions. It’s also important to populate the platforms employees use so it’s accessible.
“The impact of AI is not something we’ll see overnight. It’s important for insurers to be strategic, moving quickly in some areas and proceeding with caution in others. We recently created a Center of Excellence for Generative AI at Xceedance, offering opportunities to identify, test and apply AI to insurance processes, particularly when it comes to claims and underwriting” said Balakrishnan. “We’re so excited about the potential of generative AI to transform every business, but it’s important to move forward with trust and knowledge.”
To download a copy of the 2024 Insurance Trends, click here.
Xceedance provides strategic operations support, technology, and data services to drive efficiencies for insurance organizations worldwide. The company helps insurers launch products, implement intelligent technology, deploy advanced analytics, and achieve business process optimization. For more information, visit www.xceedance.com.