Insurance firms bet big on AI, but customers are not as enthused

[Alfonso Maruccia]

A hot potato: Despite the increasing costs of generative AI investments, companies are still scrambling with the potentially disruptive effects of the new algorithmic paradigm. Enterprise-class executives are more than willing to bet on AI agents, but clients aren't always thrilled about dealing with them.

IBM recently shared some notable research regarding the current state of generative AI and its implementation in the insurance industry. Big Blue said there is an apparent "disconnect" between insurance companies' priorities and their customers. However, many consider AI technology essential to keep revenue flowing.

The study involved 1,000 insurance c-suite executives in 23 countries and 4,700 insurance customers in nine countries. Opinions among chief executives are almost evenly divided on generative AI outcomes, with 49 percent of the surveyed industry leaders seeing the technology as a risk and 51 percent considering it an opportunity.

Seventy-seven percent of executives surveyed said their businesses need generative AI to keep up with their competitors. Investments in AI technology are expected to grow by over 300 percent between 2023 and 2025. Pilot projects are now being implemented in production environments, although business leaders could face a challenging relationship with clients after spamming their carefully trained AI algorithms everywhere.

Only a modest 29 percent of insurance customers felt comfortable dealing with AI-powered virtual support, and even fewer people (26 percent) trusted the reliability of their answers. Big Blue still thinks generative AI is good for business, with advanced algorithmic capabilities improving revenue prospects by up to 14 percent.

However, the AI bubble could eventually burst, bringing chaos and disruption to Wall Street, a situation many CEOs might welcome, as generative AI has shown to be better at doing their job than they are. IBM has a few recommendations for enterprise clients, although it is likely more interested in selling its AI and cloud solutions than anything else.

IBM says insurance companies should use generative AI to build "more tailored" products that are flexible and linked to realistic risk data. They must also address the trust issue, ensuring that their AI behaves ethically and giving local (human) experts the ability to connect the algorithm to the insurance value chain is paramount.

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Insurance firms bet big on AI, but customers are not as enthused

 

[wiak]

Thats nothing new, AI is not that good at customer service relations, Klarna for example is useless you want to get a repeat of what they had written on their website heh

 

[Uncle Al]

The insurance industry is already in trouble with most customers. Prices are causing droves of people to drop their home owners insurance and were it not for state laws, most drivers would do the same with their cars. Companies that "spread the liability" in unfair ways are hated the most.....

 

[Underdog]

And as long as car manufacturers continue to be utterly hopeless at making cars theftproof insurance premiums will continue to rise.

 

[NumberNine]

IT company says you need more IT.

Thanks TechSpot.

 

[bandit8623]

And as long as car manufacturers continue to be utterly hopeless at making cars theftproof insurance premiums will continue to rise.

how do you make a car theft proof?

 

[Steveb8189]

how do you make a car theft proof?

Substantial improvements are very very easy fromt he low baseline they are currently at.

If Apple can stop anyone but the most elite state sponsored hacking groups getting into a locked iphone I'm pretty sure it's possible to implement the same for cars for very little money. Bottom line is theft is good for car manufactures.

 

[AlexIL]

Greed backfires. People earn less, there are less meaningful jobs, more time spent at work leading to less time with family and friends. Groceries prices rising. People driving less and looking where to cut costs. First victims of it is insurance companies then the banks. Disconnect between top earners and regular Joe is like living on different planets. AI won't solve any of humanity real issues. Just more greed and less meaningful jobs. Today the only ones who haven't been affected by AI is people working in construction and most basic tasks where you simply can't implement AI due to physical nature of it. Even judiciary affected already. When difference between top earners in the company and lowest paid in thousands of percentage points that can't end well in the long run. I don't understand optimistic approach of insurance at all.

 

[bandit8623]

Substantial improvements are very very easy fromt he low baseline they are currently at.

If Apple can stop anyone but the most elite state sponsored hacking groups getting into a locked iphone I'm pretty sure it's possible to implement the same for cars for very little money. Bottom line is theft is good for car manufactures.

Not a valid point. Apple phones get stolen all the time

 

[Steveb8189]

Not a valid point. Apple phones get stolen all the time

This is true. But a bricked phone is a bit easier to snatch than a bricked Audi Q7