3 days ago
AI's impact expands beyond underwriting in insurance sector: Report
Artificial intelligence (AI) continues to reshape the insurance sector, extending its influence beyond underwriting and risk profiling to other critical areas of the insurance value chain, according to a new survey by GlobalData.
Underwriting and risk profiling remain the areas most positively impacted by AI, with 45.8 per cent of industry professionals identifying them as the top beneficiaries.
However, this represents a decline of nearly 10 percentage points since 2023, suggesting that insurers are increasingly applying AI in other functions.
Claims management and customer service followed, with 20.3 per cent and 17.6 per cent of respondents, respectively, citing these areas as most influenced by AI. Customer service, in particular, has seen notable growth, increasing by 6.2 percentage points since the previous poll. Similarly, AI's role in product development more than tripled in recognition, rising from 1.9 per cent to 7.2 per cent.
Charlie Hutcherson, Associate Insurance Analyst at GlobalData, said insurers are now broadening their AI applications beyond underwriting, despite challenges such as regulatory hurdles, data quality, and fairness in risk models.
He highlighted the increasing traction AI has gained in customer service, where automation enables faster triage, more accurate responses, and higher satisfaction rates.
Hutcherson also pointed out a rising impact of AI in product development, reflecting insurers' growing focus on trend analysis, identifying coverage gaps, and accelerating speed to market. He described the overall shift as a sign of a 'more mature and diversified approach,' with insurers recognising AI's transformative potential across multiple areas of their business.
With rising competition, insurers face pressure to differentiate themselves by expanding AI capabilities not just in efficiency-driven processes but also in customer-facing and product innovation areas. Hutcherson stressed the need for a holistic deployment of AI, balancing efficiency gains with fairness, transparency, and regulatory compliance.'
Those who can strike this balance will be best positioned to build long-term trust and value,' Hutcherson said.
