AI and the Future of Insurance
Opportunities, Challenges, Adoptions, and Ethics
December 4, 2023
The AI universe is expanding rapidly. When ChatGPT, a generative AI-based chatbot supported by natural language processing (NLP), debuted last November, it created a global sensation. At the same time, many questions arose from people and businesses worldwide, and the insurance industry was no exception. Popular questions include: How can we use it? Which company is already using it, and how? Are there security concerns? How will it be regulated? Will it eliminate our jobs, or even worse, will it take over humans? Data scientists worldwide were flooded with these questions, some of which are difficult to answer.
The initial interest was high, but so were confusion and fears. This is completely normal and understandable. The speed of changes is so fast, it is hard to keep up. The insurance industry generally takes a slow and conservative approach to innovation due to regulation and other factors. It is not easy for our industry to adjust and act swiftly. But we know this AI transformation is just the beginning, and insurers must make a move before it’s too late.
This article discusses several critical points to consider in adopting AI to insurance businesses, including its developmental background, challenges and opportunities, real-life adoption cases, the role of reinsurers, and ethical aspects.