With the thousands of blogs, articles, and presentations on AI and P&C insurance saturating the market, you may be wondering, “What more can be brought to the table?” While this may seem like just another blog on the topic, our research at ReSource Pro goes deep into the current state of AI across the ecosystem – agents/brokers, MGAs, and carriers.
It would be easy to share real and potential use cases, and I have been doing so in many forums and with many customers over the years. However, here, I want to address AI from a completely different angle – how AI will change the customers and risks of the industry.
How is AI transforming insurance, and who does it impact?
Most of the discussion on AI and insurance centers on operations… and there is certainly great potential to improve operational efficiency and effectiveness for all entities across the ecosystem. More efficient workflows and improved decisioning are always highly sought after, and AI solutions enable the industry to take those to new levels. But it is worth spending time thinking about the impact of AI on the external environment – customers across personal lines, commercial lines, and various industry verticals.
When AI is combined with the Internet of Things, there is great potential to dramatically reduce risk for consumers, businesses, and governments. Analyzing real-time streams of information about things and people and taking automated actions may go a long way in improving the risk landscape. There is a tremendous opportunity to reduce accidents, quicken incident response time to mitigate damages, and find innovative ways to address coverage gaps, just to name a few possibilities. Can we engineer away risk? Unlikely. However, it is likely that new risks will emerge due to technology (they already are) and that existing risks will become more complex.
How will AI impact insureds?
Our advice for every broker, MGA, and carrier is to consider the customer segments they serve and how technology and AI will change their world. Will we reach a point where homes are so smart and vehicles so autonomous that we see claims plummet? Will devices, data, and AI in specific work environments dramatically change workers’ comp insurance? Will the IoT and AI change how we manage risks for commercial properties in various industries? The better question is how tech in these spaces will evolve over time and what that will mean for insurance distribution, product, underwriting, pricing, servicing, and claims. And, oh yes, loss control engineering. Those who leverage their expertise on customers, risks, and technology to help manage and improve risk for their customers will be successful in the future.
So, the answer to the question of whether AI will truly transform the insurance industry is a resounding yes. When the full picture of industry operations, customer segments, and risks is considered, there is tremendous potential to radically change P&C insurance. How we mitigate, manage, and finance risk is poised to change significantly, and the industry must align all aspects of the business to these coming realities.
