A $50 Billion Opportunity Emerges for Insurers from GenAI's Potential to Boost Revenue
AI technology allows insurance businesses to optimize sales channels and digital advice and deliver personalized customer experience
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[Image source: Krishna Prasad/MITSMR Middle East]
Artificial Intelligence technology has the potential to streamline operations, taking over tedious and repetitive tasks so employees are free to focus on high-value work. However, taking full advantage of these possibilities requires business leaders to approach AI with curiosity and openness.
According to research from Bain & Company, insurance businesses worldwide have a $50 billion financial opportunity from GenAI to harness the technology in ways that could boost their revenues by as much as 20% and cut their costs by up to 15%,
Bain’s report, It’s for Real: Generative AI Takes Hold in Insurance Distribution, stated that leveraging GenAI in insurance distribution can yield more than $50 billion in annual economic benefits for companies in the sector.
“For insurers, benefits due to GenAI will come through three routes,” said Bhavi Mehta, global lead of AI in Financial Services at Bain. “This includes raising productivity, lifting sales through more effective agents and digital advice, and better risk identification and targeting to help customers, agents, and the enterprise.”
Early use of GenAI within insurance suggests the technology will transform distribution in four ways, including:
Agent productivity: The technology will help agents to navigate and produce content faster. It will reduce low-value interactions and provide coaching for more effective customer interactions.
Customer self-service and sales support: An always-on virtual assistant will extend the availability of agents and help customers with product comparisons and digital purchases.
Hyper-personalization at scale: Tailored conversations, content, and offers will more readily respond to individual customer needs.
Business insights and decisions: Combining signals from unstructured data with structured data will yield new insights and aid in risk identification.
Bain’s analysis also pinpoints key risk areas emerging from insurers’ developing use of generative AI, including hallucination, data provenance, misinformation, toxicity, and intellectual property ownership.
“As with any nascent technology, there will be risks,” said Sean O’Neill, leader of Bain’s global Insurance practice. “To manage risks, insurers should adopt a responsible AI strategy that includes short-term priorities, as well as a long-term vision enabling companies to build valuable AI capabilities to redefine their business operations.”
As Gen AI continues to evolve, Bain urges insurance companies to take several critical steps to adapt to the fast-developing technology. These include aligning across business units on how AI can support business strategy, determining what to build internally and what to buy from vendors, ensuring that delivery teams are cross-functional, and designing an adaptable operating model.
At the NextTech Summit, the region’s foremost summit focusing on emerging technologies, global experts, MIT professors, industry leaders, policymakers, and futurists will discuss AI Black Box, Quantum Computing, Enterprise AI among many other technologies and their immense potential. The summit will be held on May 29, 2024, at Madinat Jumeirah, Dubai, UAE.
