In the fast-paced world of technology, a convergence of cutting-edge innovation is reshaping our way of work. Some would say it’s even reshaping our very existence.
As the exponential rise of artificial intelligence unfolds, it bears an uncanny resemblance to the dramatic thriller “Terminator,” where robots come to life and take over the world. Here, the plot unfolds not in Hollywood scripts but in the very fabric of our day-to-day lives.
The insurance industry, generally viewed as a stable and reliable sector, now stands at the mercy of this AI uprising. Jobs that were once conducted by humans are usurped by cold, calculating algorithms, leaving a trail of uncertainty and displacement for workers. While AI augments the capabilities of carriers, producers and staff, it also stimulates the need for a more skilled workforce that can harmonize technology with human expertise to execute tasks.
For those counting clicks to completion, AI’s ability will revolutionize the speed at and efficacy with which risk is assessed, sales are made, policies are underwritten and how claims are processed. AI will be capable of mimicking the perception, the reasoning and the problem-solving of underwriters. Actuaries and claims handlers will require less input from the human brain due to the reliance on neural networks they have been modeled after. Data latency, a common concern across most insurance value chains, will be greatly reduced or even eliminated.
The exponential growth of AI has accelerated the digitization of data across shared devices and networks. Data lakes — vast data repositories — will become useful, leading to seamless and real-time data accessibility. Experts from McKinsey estimate there will be up to 1 trillion connected devices by 2025, further fueling the data revolution in the insurance industry.
As in “Terminator,” enhanced robots and cognitive technologies will command attention. Deep learning methodologies will further invade imagery, voice and text processing, pushing the boundaries of what AI can achieve. As the insurance industry finds itself at the forefront of this technological revolution, it must embrace the transformative power of AI while keeping a keen eye on responsible and ethical implementation.
The rise of AI and its dramatic impact
As AI’s capabilities surge, so does its potential for exponential growth. From health care to finance and beyond, AI is altering the course of human action. Its power leaps beyond our imagination, quickly becoming an indispensable tool to the insurance industry. One reason for this is that AI offers unmatched capabilities.
It empowers, navigates uncertainty, makes informed decisions and enhances overall efficiency. It can sort and process legacy data and further incorporate real-time data and analytics at higher speeds than before. Like a machine learning algorithm refining its predictions, AI is adapting and evolving, becoming more powerful than its previous iteration.
However, as AI continues to evolve, concerns arise about potential job displacement and the ethical implications surrounding the use of advanced algorithms. While AI offers remarkable capabilities, there is a need to ensure its responsible deployment and address the potential impact on the workforce and society as a whole.
As we navigate this unprecedented journey, our perception of AI’s impact on society will guide us as we wield its power responsibly. As insurance experts, we can prepare and educate ourselves and our clients so that we can help shape a future where technology empowers rather than subdues. Pivoting toward the digital economy will not be easy, but it will be necessary to establish the pathways to smooth the transition for ourselves and for our clients in this modern era.
Pivoting toward AI technology: The worker is also the client
The roughly 2.35 million insurance licensed individuals in the U.S. face a pivotal moment in their careers as they navigate the future of the industry. Insurance historically has been slow to adopt innovation, making the transition to technology-driven roles a special challenge. As the insurance industry lags in terms of innovation compared to sectors such as decentralized finance and fintech, it’s evident that AI’s infiltration into insurance job placement is inevitable. The older demographic within the insurance workforce adds urgency to this shift. It’s not a matter of if but when AI becomes embedded in every aspect of the insurance landscape.
Traditional roles in insurance will undergo a profound transformation, and adaptability will be key for individual success. Early adoption of AI and technology by each individual — not the enterprises alone — will be essential in distinguishing them and securing their roles in the future of insurance.
So what opportunities lie ahead?
AI in the insurance space can be both an ally and an adversary, depending on how individuals embrace its capabilities and adapt to change.
Here are a few examples of how AI enhancements improve job experiences in the insurance sector.
• Actuarial/pricing: AI and ML algorithms analyze historical data, predict outcomes, and drive data-driven decisions and consumer-centric product development. AI can transform how actuaries visualize and present their findings, which can bring a fresh, modern twist to everyday mundane tasks.
• Underwriting: AI tools streamline decision-making, eliminate manual work, and balance fraud detection and risk management while promoting continuous learning and skills development.
• Recruiting: AI can analyze candidate data through predictive analytics that will cross-reference resume, social media and even online behavior. It can improve candidate experiences, streamline onboarding and even gamify the experience for both recruiter and candidate.
• Administration: AI can automate 70%-90% of data input for human assistants, reducing task-handling times from 10 minutes to one minute. Tedious work becomes interactive, fun and enjoyable.
• Project management: Valuable insights with predictive capabilities identify potential roadblocks, forecast risk and allocate resources more efficiently. Increased transparency and real-time updates enhance project success rates. Project managers can focus on high-level strategic thinking.
• Sales professionals: AI promises to optimize operational efficiencies in the client management arena by 30%, enabling sales professionals with new business generation analytics and automatic portfolio monitoring. AI integration can boost productivity and turn prospecting and client exploration into an exciting journey.
• Marketing professionals: AI-embedded customer relationship management systems offer deeper customer insights for marketing professionals to create highly personalized content and predict promising leads for improved conversion rates. AI-powered content-
generation tools can foster creativity and bring a sense of fulfillment in producing captivating material.
• Claims professionals: This area uses natural language processing for improved customer experience, faster claims processing and fraud detection. NLP enables machines to understand human language, reprocess text and speech data for analysis, and generate valuable insights. AI can reduce stress and bring greater fulfillment in this critical role.
AI is the new black
Considering the aging demographic of financial advisors (average age is 56), addressing AI opportunities must align with our labor force’s demographics. Recruiting new talent that matches our clients’ demographics becomes crucial for successful succession planning.
Understanding distinct buying patterns of millennials, Generation X and Generation Z is essential for carriers to stay competitive and relevant. The collective purchasing power of these generations reshapes the financial and insurance decision-making landscape.
As millennials and Gen Z gain prominence in the workforce, their preferences significantly influence the industry. By leveraging AI trends, carriers have a unique chance to appeal to these generations, enhancing the insurance-buying process and growing market share and wallet share.
Millennials, known for their digital prowess and desire for personalized experiences, favor seamless and convenient processes. Gen Z, born into a tech-savvy world, values authenticity and quick responses. Gen X, on the other hand, seeks a balance between digital convenience and human touch. These generational preferences present a call to action for carriers to adopt AI-driven solutions that align with each demographic’s distinct needs while also attracting their talent to their organization to help drive company objectives.
Along with recruiting new talent, it is equally crucial for carriers to recognize the value of retaining senior talent as subject matter experts during business transitions. Their experience and expertise can play a vital role in guiding the integration of AI and driving companywide success.
Cracking the code between carrier and client involves understanding the unique buying patterns of current clients and new potential millennial, Gen X and Gen Z prospects. AI algorithms can understand the unique requirements of millennials, Gen X and Gen Z, tailoring coverage options accordingly.
AI enables carriers to identify underrepresented segments in the market, which also brings attention to the lack of representation by agents and brokers servicing these demographic segments. By bridging this gap with AI, carriers can create targeted marketing strategies that appeal to different generations and other underrepresented market categories, reaching them through their preferred digital channels.
AI’s power lies in its ability to enhance the insurance-buying decision, cater to diverse generational needs, bring fulfillment to the workforce and bridge the representation gap in the insurance industry. As carriers adapt their strategies to align with these tech-savvy demands, they have an unprecedented opportunity to expand their market share and build relationships with a new wave of employees and clientele.
By taking control of this transformative technology, carriers can shape the future of insurance and stay ahead in this dynamic and evolving landscape.
The future of the insurance industry will rely on striking a delicate balance between human expertise and the limitless potential of AI. By fostering collaboration, upskilling the workforce and embracing innovation, the industry can unlock a new era of possibilities, ensuring that AI becomes a true ally rather than an adversary. The stage is set for a gripping tale of technology and humanity, where responsible AI usage shapes a future of promise and prosperity for insurers, employees and customers.
To read part one of this special 3-part series, "The data privacy landscape is plagued by fragmentation," go here.