Generative AI in Practice is InsTech’s monthly newsletter dedicated to the use of generative AI in insurance.
The InsTech Perspective
The billion-dollar spend
We know about unicorns, the billion-dollar valuations of early-stage technology companies. Now the established companies are joining the billionaires’ club and seeking to make their mark by allocating significant amounts of people and money to generative AI. In the last couple of weeks two global consultants revealed to us that they have each assigned over $1 billion to develop their offerings. One of the companies is planning to hire 30,000 generative AI experts. This compares to $58 billion invested in all insurtech companies since 2015, according to Dealroom. We can’t promise to make you employable as an expert in GenAI – but read on if you are wondering what all the fuss is about.
Use case of the month
Your call is important to us…
The insurance claims process can be time-consuming for both insurers and claimants. No surprise then that insurers are looking to streamline existing manual processes with generative AI.
Insurance companies are experimenting with GenAI-powered chatbots that can help answer policyholders’ questions, relieve pressure on customer service teams and save us all from endless holding music. Generative AI-powered workflows can be set up to monitor incoming emails and direct claims to the correct team. Another capability of generative AI is extracting information from documents, which could help the adjuster understand the claim that has been submitted more quickly and interrogate the relevant policy wording. In this issue, we explore how Moody’s RMS is building a conversational AI tool to help insurers anticipate the size of losses from claims even before they happen. Generative AI will not be suitable for all aspects of the claims process, but it can help make several aspects of it more efficient.
What the insurance industry is doing with GenAI
Swiss Re, Greenlight Re and Chaucer are underwriting a new performance guarantee for AI products in partnership with start-up Armilla Assurance.
Markel‘s underwriting teams experienced a 113% productivity increase after using Cytora‘s generative AI-supported workflows for underwriting submissions.
Swiss Re is “investing significantly in generative AI”, and sees particular potential in using GenAI combined with quantum computing to inform pricing.
SCOR has provided what it calls “secure access” for its employees to experiment with AI, as an alternative to ChatGPT.
Insurer New York Life Insurance is developing a GenAI tool to help its customer service representatives answer complex questions.
Broker NFP is using an OpenAI-powered tool to write marketing copy, emails and meeting notes and one of its executives says he “wrote [his] entire 2023 business plan with AI”.
Generative AI is part of insurer Prudential’s strategy to make the customer journey more frictionless and simplify distribution.
MGA LOOP Insurance has tripled the number of customers whose support queries are resolved on its chatbot after incorporating GenAI, with email support volumes reduced by 55%.
Australian insurer Suncorp is investigating use cases of GenAI including customer service in the claims process, as it gains early access to Microsoft 365’s generative AI service Copilot alongside Bupa.
News from the InsTech network
The insurance industry is in the middle of the pack compared to financial services peers in its adoption of generative AI so far, according to KPMG’s Sam Taylor and Paul Merrey, as one of the findings from talking to over 300 industry executives about their AI plans.
Sprout.ai’s CEO explains how the company uses generative and other forms of AI to automate aspects of the claims process for insurers such as AXA, MetLife and Generali.
Claims processing and analysing unstructured documents are where generative AI will have the most immediate impact in insurance, according to Future Processing.
Moody’s RMS is working on a generative AI tool that would help insurers answer questions such as “what’s the likely loss?” when a hurricane is approaching.
More capital will flow into the insurance market if insurers use generative AI effectively to build a better view of risk, according to the CEO of Aon’s Strategy and Technology Group.
EY’s insurance team writes that “robust governance frameworks are essential” for insurers adopting GenAI.
Parametric insurance provider Arbol is looking at using LLMs to identify which data source is best suited to insure clients against a particular climate risk.
What is GPT? Indico Data explains the history of large language models and what it means for large organisations.
Insurers need to track the ethical and intellectual property effects of AI on the creative industries and keep brokers and clients informed, according to CFC.
Instabase explores how insurance brokers can use generative AI for contract comparison.
Simplifai, which specialises in AI-powered automation for insurance, has joined the InsTech network. A case study sets out how Simplifai helped Dutch insurer Nh1816 save 80 hours a week on claims processing.
Other news and insights we’ve seen
Not insurance, but Microsoft has committed to offering legal protection to its customers if they are sued for copyright infringement over content generated by its AI products.
Life insurers in Colorado will have to report to regulators on how they manage the risk that AI or algorithms used in pricing, including those used by third-party vendors, cause discrimination.
Generative AI is being used by cybercriminals, increasing the risk of phishing, according to a senior risk consultant at broker HUB International.
80% of brokers surveyed by RSA Insurance already use AI in their daily processes.
Technology company Evident has launched a generative AI solution to help risk managers collect and verify the information they need to purchase insurance.
How InsTech has used AI this month
For InsTech’s podcast this month, our marketing team has been using a generative AI tool to help produce materials that help make our podcast easier to find in search results and reach more listeners. Our podcasts are in high demand, with two releases a week expected until the end of the year. The tool we are using generates written content such as summaries, transcripts, titles and articles from podcast audio files or YouTube videos automatically. A favourite feature pulls out quotes the AI found interesting in specific moments of the audio.
Generative AI in Practice is InsTech’s monthly newsletter dedicated to the use of generative AI in insurance – you can sign up for free here.
