Generative Artificial Intelligence (AI) is demonstrating its value across many industries and walks of life, and the insurance industry is no exception. For insurers who are leveraging this advanced technology, there are many opportunities and benefits to be gained.
From Capturing Valuable Data to Improving Operations
Applying Generative AI enables insurers to identify potential growth opportunities and then develop new market responsive product offerings or tap into new markets. Generative AI also facilitates content development reducing the labor costs typically associated with this function. The associated algorithms learn from data input which enables generation of original content from white papers to blogs and LinkedIn articles. Generative AI helps advance an insurer’s marketing goals while supporting overall productivity. Additionally, this advanced technology can generate dialogue for virtual assistants and automate code generation. Its capture of valuable data and the related insights provided for informed decision making further demonstrates the value of Generative AI.
Generative AI also is extremely effective in vastly improving an insurer’s operations. Generative AI models such as GPT 3.5 and GPT 4 can automate various business processes and elevate various areas of operation including claims management and customer service.
Managing Risks
AI, in general, has come under considerable scrutiny for the potential risks it brings. Cyber criminals, in particular, are abusing this powerful technology to commit a wide range of cyberattacks (i.e., deep fakes, ransomware, phishing, denial of service, etc.) and financial fraud. Generative AI, in particular, is subject to imitating biases and generating discriminatory behavior in the absence of responsible guidelines. Because Generative AI models are trained on a foundation of proprietary and private data, it is essential that regulatory compliance be met with such actions as source traceability.
Also to be considered is the potential negative impact on customer service. By and large, insurers emphasize the human touch in their customer relationships. Customer service representatives strive to show empathy and understanding of their customers’ concerns. Generative AI can eliminate this human touch factor leaving customers dissatisfied with the service they receive.
Responsible Use of Generative AI
Insurance regulators expect insurers to perform due diligence in their application of Generative AI. Best practices call for an individual or individuals to be charged with AI oversight and compliance with federal and state laws pertaining to cybersecurity.
While Generative AI and AI in general has tremendous potential for optimizing insurers’ business operations, its application must be accompanied with responsible practices and guidelines to avoid inherent risks.