Insurance Professionals Face Challenges in Adopting AI and Modern Pricing Technology

New research from hyperexponential, a pricing platform for global insurers, reveals growing concerns in the insurance industry about the integration of artificial intelligence (AI) and the adequacy of current pricing technologies. According to the ‘State of Pricing 2024’ report, 91% of insurers are investing in or plan to adopt AI within five years, but 80% of actuaries and 74% of underwriters are anxious about lacking the necessary technical skills. Additionally, fears of being replaced by AI are rising, with 69% of underwriters and 67% of actuaries worried about their roles in the next five years.

Other major challenges include the integration of new and legacy systems, with 47% of respondents finding it difficult to price optimally. Moreover, 51% feel their current technology doesn’t meet the evolving demands of risk management. The report also notes only 19% of insurers use external data in pricing models, highlighting an underutilization of available resources. Hyperexponential’s CEO, Amrit Santhirasenan, emphasized that while AI is not a one-size-fits-all solution, it can greatly enhance productivity and reduce the risk of burnout—another significant concern among industry professionals.

The findings also underscore the importance of preparing the workforce for an AI-driven future. Many actuaries (80%) expect coding proficiency to become crucial, while underwriters are increasingly anxious about transitioning from risk underwriting to portfolio-based approaches.