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From changing customer needs and consumption behaviours to rising operating costs compounded by talent shortages, the insurance industry is facing headwinds.  With the emergence of Generative AI, the question many are asking is the role it could play in reshaping and enabling a more effective and resilient operating model.

IBM has recently surveyed 3,000 C-suite executives globally, including 150 from the insurance sector. Customer experience (53%), cybersecurity (49%), and technology modernization (44%) were identified as insurance CEOs top priorities over the next three years. The survey also found that they are more likely than their global peers to expect to realize value from advanced analytics, cloud, IoT, and AI and are increasingly looking toward technology and data leaders as strategic decision makers. On top of that, 75% of all CEOs surveyed in the insurance industry believe the organisation with the most advanced Generative AI wins.¹

Opportunities presented by Generative AI from front to back-office for insurers

Across all industries, Generative AI is already having a profound impact across various domains, including but not limited to marketing, HR, customer care, finance, IT, legal, etc.

The adoption of Generative AI capabilities holds immense promise in reshaping the target operating models of companies, specifically through four key capabilities – summarization, conversational knowledge, content creation, and code development. So, what does this mean specifically for the world of insurance?

IBM believes Generative AI can deliver the most value within insurance in three major aspects: customer care, application modernization and digital labour.

For customer care, Generative AI can be used to realize high customer acceptance of personalized risk conversations and advice, virtual agents to assist customers while keeping agents and service reps in the loop, immediate and personalized recommendations to service reps for next best action on claims and policy admin.

For application modernization, Generative AI can be used to change business case for legacy core application modernization, retain key benefits of IBM Z as secure data repository and AI platform while enhancing performance, security, sustainability and reliability. It can also achieve AI-powered modernization of insurance rules and code bases with high reuse/acceptance.

For digital labour, we can leverage Generative AI for underwriting information gathering and synthesis across many data stores, summarization of claims case details to speed claims resolution with automated entry for jet resolution, and improvement of agent productivity with data fill and routine tasks, such as policy transfer and direct customer assistance with simple tasks.

In HK and around the globe, IBM has been working with insurance industry clients on their Generative AI journeys, with use cases that have leveraged the difference capabilities of Generative AI.

Are you ready for Generative AI?

However, despite the wide range of potential benefits introduced by Generative AI,

60% of organisations today are not yet developing a consistent, enterprise-wide approach to Generative AI according to CEOs surveyed.²

To help business leaders accelerate their Generative AI journey, IBM Consulting employs a structured approach to help organisations identify the starting point that promises the greatest returns from implementing Generative AI. By leveraging IBM’s Industry Model for Insurance, the team will conduct a thorough analysis of the insurance company's workflow across business domains and evaluate the potential impact and readiness of AI and automation in each workflow, providing valuable insights into the areas that offer the insurance organisation the highest ROI.

The business impact evaluation considers the scale of financial impact, efficiency gains, and other benefit drivers such as enhanced customer experience, improved decision marking, and increased sales opportunities. The team also takes into consideration the potential legal and reputation risks associated with implementing Generative AI, evaluating strategies to mitigate these risks through control and governance measures. This comprehensive risk assessment ensures that the chosen starting point not only offers a favourable ROI but also minimizes potential drawbacks.

Empower your business in the age of AI

With nearly half (48%) of CEOs identifying productivity as their highest business priority in 2023 and 75% of CEOs believe the organization with the most advance Generative AI wins, insurance industry leaders have a choice: let AI happen to them, or take the lead in its safe, secure, and responsible implementation. The opportunity to turbo charge workflows, empower the workforces, deepen customer relationships and create new revenue generating business models is significant as is the risk of being left behind.

IBM is committed to unleashing the transformative potential of foundation models and

Generative AI. We provide open, trusted, and targeted value-creating AI solutions for businesses.  IBM watsonx, our integrated AI and data platform, embodies these principles, offering a seamless, efficient, and responsible approach to AI deployment across a variety of environments.

With IBM, you're not just an AI user—you're an AI value creator. Whether it's fine-tuning open sourced models, creating your own, deploying AI on-premises or in the cloud, or gaining transparency into AI decisions, IBM stands ready to empower your business in the age of AI.

Let's embrace the age of AI value creation together.

Feel free to reach out to us.

Karen Ko, Partner, Head of Business Transformation, IBM Consulting Hong Kong
karen.ko@ibm.com

Chris Leung, Associate Partner, Data & Technology Transformation, IBM Consulting Hong Kong
hfleung@ibm.hk1.com