Research by KPMG on the insurance industry’s adoption of AI technology reveals 85% of those surveyed have high expectations they’ll obtain a competitive edge over non-users.
However, it seems that while the emerging technology is used by general insurers for back office chores, life companies use AI across the whole business.
In the foreword of the Intelligent Insurance report, Frank Pfaffenzeller, Global Head of Insurance KPMG International, writes that AI adoption in life and non-life insurance differs considerably.
“Life insurers managing long-term risks rely on biometric, medical, and behavioural data to assess longevity and morbidity,” he writes.
“AI is revolutionising their underwriting processes by automating risk segmentation, integrating electronic health records, and utilising predictive analytics to refine policy pricing and assessment.”
He says life insurers are integrating wearable data and wellness tracking to personalise policy pricing, rewarding healthy behaviours.
Meanwhile, general insurers are mainly using AI for back-office routines to manage the high volume of claims.
Despite this, trust in AI is a concern for many, with 46% of respondents citing reservations that it can be relied on. However, a quarter of survey respondents do trust it within their organisations and 57% say it is giving customers a better experience when dealing with them.
Pfaffenzeller also states AI is improving claims automation by identifying fraud, analysing death certificates, and streamlining payouts through machine learning.
“Beyond underwriting and claims, AI is transforming longevity modelling and regulatory compliance in life insurance,” he states.
“Predictive analytics powered by AI can assess life expectancy, detect disease onset and optimise risk stratification, enabling insurers to refine pricing and payout structures.”
