C-suite executives see generative AI as both a
risk and an opportunity
ARMONK,
N.Y., Oct. 16, 2024 /PRNewswire/ -- New research
by IBM's (NYSE: IBM) Institute for Business Value identifies a
disconnect between how insurers and their customers prioritize the
use of generative AI, with industry executives focusing on
experience while their clients are seeking personalized risk
products and insights.
Findings from a survey of 1,000 insurance c-suite executives in
23 countries and 4,700 insurance customers in nine countries are
outlined in Generative AI in the Insurance Industry: You
Can't Win if You Don't Play.
"The insurance industry has made headway in generative AI with
customer experience and chatbot enhancements, but insurers must
focus on adopting comprehensive governance frameworks that ensure
transparency, privacy, and explainability to ensure they are
building trusted AI assistants and reliable processes," said
Mark McLaughlin, Director of Global
Insurance with IBM Technology. "There are also significant
opportunities in connecting customers to the right products.
Leveraging AI across the enterprise will be critical to improve
both customer risk experiences and to implement the underlying IT
tools that power those experiences."
Key Takeaways
- Insurance CEOs surveyed were almost evenly divided on whether
they see generative as more of a risk (49%) versus an opportunity
(51%)
- 77% of industry leaders who responded acknowledge that
generative AI is necessary to keep pace with competitors
- Investments in gen AI are expected to surge by over 300% from
2023 to 2025 as organizations move from pilots in one or two areas
to implementations in multiple functions across business lines
- Only 29% of insurance customers queried said they are
comfortable with gen AI virtual agents providing service, with only
26% saying they trust in the reliability and accuracy of advice
given by generative AI
- Organizations choosing less-centralized operating models to
develop gen AI capabilities can improve business outcomes by up to
14%
Recommendations
- Build more tailored products with flexibility, advice, and
linkage to risk data
- Match those products intelligently to customers' needs
- Address trust issues with strongly ethical, governed AI
- Also use AI to connect the underlying risk data and address
long-standing insurer and financial service provider technical
debt
- Deploy – and govern – AI across the enterprise with local
knowledge experts empowered to connect AI to the insurance value
chain
Download the full report
here: www.ibm.com/thought-leadership/institute-business-value/en-us/report/insurance-generative-ai
IBM is a leading provider of enterprise AI, hybrid cloud
architecture, security and ESG insights to the global
financial services sector. Its deep industry expertise, extensive
portfolio of services and solutions, and its robust ecosystem of
fintech partners, empower collaboration, innovation, and creation
with clients. As a trusted partner to banks, insurers, capital
markets and payments providers, IBM guides financial institutions
on all stages of their digital transformation journeys through IBM
Consulting and delivers the proven infrastructure, software, and
services they need through IBM Technology. For more information,
visit https://www.ibm.com/industries/insurance.
Methodology
The IBM Institute for Business Value (IBM IBV), in cooperation
with Oxford Economics, surveyed 1,000 C-level insurance executives
in 23 countries in Q3 2024. 60% of the sample represented pure
insurers, 35% bancassurers, and 5% insurance captives of
non-financial services and insurance industry organizations selling
to the wider insurance market. Participants were asked a range of
questions in various formats (multiple choice numerical and Likert
scale) about their organization's expectations, results, concerns,
and barriers for the use of generative AI in various parts of the
organization, as well as relevant technological and business KPIs
that allowed a quantitative assessment of the efficacy of these
uses.
In the same timeframe, the IBM IBV also surveyed 4,700 insurance
customers in nine countries, with a minimum of 900 respondents in
each country: Australia,
Canada, China, France, Germany, Hong
Kong, Japan, UK, and US.
Customers were asked a mirror of some of the questions the above
executives received on gen AI benefits and concerns, allowing IBM
IBV to gauge agreements and gaps in executive and customer
perceptions.
The IBM Institute for Business Value, IBM's thought leadership
think tank, combines global research and performance data with
expertise from industry thinkers and leading academics to
deliver insights that make business leaders smarter. For more
world-class thought leadership, visit www.ibm.com/ibv.
About IBM
IBM is a leading provider of global hybrid cloud and AI, and
consulting expertise. We help clients in more than 175 countries
capitalize on insights from their data, streamline business
processes, reduce costs and gain the competitive edge in their
industries. Thousands of government and corporate entities in
critical infrastructure areas such as financial services,
telecommunications and healthcare rely on IBM's hybrid cloud
platform and Red Hat OpenShift to affect their digital
transformations quickly, efficiently and securely. IBM's
breakthrough innovations in AI, quantum computing,
industry-specific cloud solutions and consulting deliver open and
flexible options to our clients. All of this is backed by IBM's
long-standing commitment to trust, transparency, responsibility,
inclusivity and service. Visit www.ibm.com for more
information.
Media Contact
Mary Ellen Higgins
IBM Global Financial Services Industry External Communications
maryellen.higgins@ibm.com
m +1.781.789.1911
View original content to download
multimedia:https://www.prnewswire.com/news-releases/new-ibm-study-insurance-leaders-agree-that-rapid-adoption-of-generative-ai-is-necessary-to-compete-but-insurance-customers-express-reservations-302277082.html
SOURCE IBM