The brave new world of Artificial Intelligence is here. And the Insurance industry is still trying to figure out, like Dom Cobb, if AI is a dream or a nightmare.
For starters, the Insurance industry per se is ONE OF THE MOST RISK AVERSE INDUSTRIES. And it has to be as the famous tagline of a leading Insurance company assures its customers – ‘With Us, You’re Sure.’
Fortunately for the Insurance industry AI is tech’s next BIG THING and is built on top of decades of existing machine learning already embedded in business processes. Investors are pouring billions into companies based on generative AI, and the list of apps and services driven by large language models is growing longer every day. Case in point: ChatGPT, the sensational text-generating bot released by OpenAI last year, had 100 million active users in January 2023, only two months after its launch.
Is it time to take a leap of faith?
To decipher the AI maze, we asked Jyoti Ranjan, Sales Head- Branch Banking at Aditya Birla Capital, to break down the potential and pitfalls of AI adoption.
I firmly believe that efficiency is vital in today’s rapidly evolving industry. Generative AI presents limitless possibilities, from lightning-fast data analysis to predictive algorithms that can forecast everything from climate impacts to policyholder behavior. With AI, complex risk assessment processes can be optimized, leading to improved workflow, enhanced customer service, and accelerated decision-making.” shares Jyoti.
Data is Gold. At a recent Sequoia event, Sam Altman mentioned that one of the main reasons OpenAI built ChatGPT was to get human feedback from end users back into their models.
The right data can transform CX and how Insurance agents build relationships with their customers. For example, a young professional at the beginning of her career will need different advice than a homemaker planning to save for retirement. Better information on the customer lifecycle will enable better personalization.
Hyper-personalization will change the dynamic between the insurer and the insured. AI can build and update customer profiles with new data. It will create new ways to collect, process and manage customer data as customers increasingly prioritize trust and privacy.
What about Gen Z and Millennial Insurance agents?
For this ‘digital native’ demographic, foosball tables, yoga bars, and meditation sessions simply don’t cut it anymore, as Venkat Malladi, Co-founder/CTO at Vymo, succinctly points out in this Forbes article.
Many Gen-Z job seekers are now more focused on security than on landing their dream job.
“Insurance as an industry must seek cutting-edge tools with AI and ML capabilities and analytics to enable their workforce to be productive and cross-functionally collaborative and build their careers in the long run,” says Venkat.
For the younger generation, AI can be the tool that opens a portal to tomorrow.
Then as always in an epic tale, there is a downside to the story.
“Fairness is one of the most important ethical considerations when using AI in insurance. It’s crucial that AI doesn’t perpetuate any kind of bias or discrimination. Suppose historical data used in underwriting shows that people in a certain zip code are more likely to file claims. In that case, an AI program may unfairly penalize all residents of that zip code, even if they have a good driving record. It’s crucial to ensure that AI doesn’t perpetuate any bias or discrimination, so fairness should always be a top priority.” says Joyti Ranjan.
Are we looking at an AI Apocalypse? Frankly, we don’t know. But it’s getting curiouser and curiouser.
The use of AI in determining insurance premiums can raise ethical concerns if it results in discrimination against certain groups or individuals.
Insurers must ensure that their AI algorithms are fair and unbiased, taking into account factors such as income, location, and occupation rather than factors that may be discriminatory, such as race or gender.
In the meantime, hackers are having a field day.
A news article has unearthed an online scam that uses AI-generated videos to steal sensitive financial data from users. What is worrisome is that these AI videos feature virtual people speaking in regional languages to appear genuine. Until now, such videos lacked credibility due to their dubious quality.
Constant vigilance is the keyword here.
We are still determining how the AI story will pan out.
Fifty years hence, will AI agents be selling ‘Robot Rebooting Health Insurance.’ Or will AI have taken over the Solar system? Or maybe Dorothy, the friendly insurance agent, will give a virtual demo on why Gen MXV2s need to take insurance on flying saucers.
There is literally magic happening, and AI is the modern era’s wand.