AI and Machine Learning are driving benefits and reducing headcount in the insurance sector
A survey of insurers by Rackspace has found that the implementation of Aritifical Intelligence (AI) and machine learning (ML) technologies are driving benefits and enabling the reduction of headcounts.
The survey found over the past 12 months 62% of insurers had cut staff numbers due to the implementation of AI and ML. They found that the new technology enabled low-level analyst work to be completed by AI and ML. 52% of respondents said they had already realised substantial benefits from AI/ML, with a further 23% seeing modest benefits. 25% of respondents said it was too early to tell.
The benefits insurers listed from implementing AI/ML were
• 81% risk reduction, increased understanding of business/customers
• 79% increased sales
• 77% personalised marketing
• 75% increased productivity
• 73% increased revenue streams, operation cost reduction
• 69% improved customer satisfaction
• 67% faster time to profitability, reduced cost of new product development, ability to hire/recruit new talent
• 65% increased innovation
There are still some issues with AI, with 42% only ‘slightly trusting’ AI/ML results compared to 28% ‘strongly trusting’ results.
Talent and skill shortages were seen by 67% as the greatest challenge to further adoption of the technology; however 90% of insurers had grown their AI and ML workforce in the past 12 months.
OpenAI recently put forward it’s arguments for how AI can positively impact the insurance industry. While there are still plenty of cons to using generative predictive text tools such as ChatGPT right now, ranging from inbuilt (training data originated) biases and prejudices to it’s failure to comprehend nuance such as sarcasm, some insurance executives believe the underlying technology could be used as a starting point to build on and to jump-start innovations in the sector. More about this subject, including a substantial number of test results, are included in our quarterly life and health report.