Similar to how iPhone technology transformed the way we communicate, generative artificial intelligence (AI) is creating new opportunities and efficiencies for the insurance industry. Most recently, our Insurance team has been working with leaders to augment and reinvent significant areas of their business. Here, we share our recent video release and discussion on Reinventing Insurance with Generative AI, with Paul Ricard, Randy Lampert, Tiffanie Couts and Matthew Fairbanks. Our discussion includes: our latest research, a primer on generative AI, how insurers can get started, risk considerations, and opportunities and key actions for industry reinvention. More highlights can be found below.
Generative artificial intelligence is having its 'iPhone moment'
VIEW KEY Highlights
- What is generative AI? Timecode: 9:10
- Risk considerations: 21:30
- Opportunities for insurers: 27:00
- Reinventing the insurance value chain: 28:55
- Insurance use cases: 33:45
- How to get started with generative AI: 53:00
Artificial intelligence is as revolutionary as mobile phones and the Internet....The development of AI is as fundamental as the creation of the microprocessor, the personal computer, the Internet, and the mobile phone. It will change the way people work, learn, travel, get health care, and communicate with each other. Entire industries will reorient around it. Businesses will distinguish themselves by how well they use itBill Gates, The Age of AI has begun
Highlights from our discussion
What is generative AI?
Generative AI is a type of artificial intelligent system capable of generating new content. It does more than retrieve pre-determined answers (which makes it generative) and is enabled by models that identify, map, and derive context from patterns within the data inputs. The science behind the technology analyzes content from large sets of information (data sets, internet, etc.) and learns and improves performance even with unlabeled and unstructured data. Generative AI can map patterns and connections within the data inputs, allowing it to understand the essence and context of an object. The technology uses advanced natural language and responds in a more conversational speaking style.
The accessibility of these tools and the wide variety of use cases they can be leveraged for creates tremendous opportunities for businesses to replace, augment, and create new solutions that will:
Opportunities for insurers
Specifically, generative AI is ushering in new opportunities for insurers across the value chain — from strategy and product design, marketing and distribution, pricing and underwriting to claims and operations, and governance.
Improve operational efficiencies
Empower employees to focus on value-added activities.
Enhance customer service
Answer customer inquiries in real-time and provide customer service agents with summarized and all relevant customer information.
Increase customer satisfaction
Generate customized recommendations and experiences for customers based on their preferences and behaviors.
For example, with these tools, insurers will be able to:
Generative AI can create new operational efficiencies and also solutions to transform the insurance business model. Our video discusses three illustrative case studies (33:55) of a life insurance agent, a commercial underwriter, and a policyholder before and after leveraging generative AI .
Enrich the insurance sales experience
Enable life insurance agents to better prioritize and customize outreach as well as meet client needs.
Transform the way underwriters assess risk
Free up commercial underwriters to focus on value-added activities.
Revolutionize customer service experiences
Transform the customer service experience for policyholders.
After its release in November 2022, ChatGPT rapidly reached 1 million users in five days, and 100 million users in less than two months. It is being used for search, customer insights and service, writing content, coding, video creation, and moreReuters, February 2023
Generative AI offers staying power due to its robustness, ease of use, and low barrier to entry. It's also quickly gained popularity and adoption in just a few months. In November 2022, OpenAI, an American artificial intelligence research lab, introduced GPT 3.5 and Chat GPT. ChatGPT rapidly reached 1 million users in five days, and 100 million users in less than two months. It is being used for search, customer insights and service, writing content, coding, video creation, and more. In March 2023, OpenAI released its next iteration GPT 4.0, a multimodal large language model that offers broader general knowledge and problem solving abilities. GPT 4.0 can solve difficult problems with greater accuracy.
We do believe that the risk associated with implementing Generative AI solutions needs to be carefully assessed prior to rolling these types of tools out. As insurers think about the short- and long-term possibilities, it will be important for them to consider a few key critical questions:
- What internal/customer needs are we solving?
- Is generative AI the right way to solve it? Can it solve the problem on its own or does it need to be combined with other technologies?
- What risks do we anticipate from the introduction Generative AI? How can we mitigate them?
- How can we educate executives and end-users about Generative AI, its potentials, and its risks?
At Oliver Wyman we have been helping clients understand generative AI and what it means for insurers, and guiding strategic moves — closer in and further out — around this evolving ecosystem. We look forward to exploring opportunities on how to start and/or the best ways to pilot and scale your AI journey.
This on-demand video and discussion is part of our Leading in the Age of Acceleration series.
The future is now. Generative AI is ready to help insurers transform the way they do business — both internally and externally