Insurance Sector on the Brink of Change with Generative AI Advances

The insurance industry is experiencing transformative changes as artificial intelligence (AI) evolves rapidly, according to Edin Imsirovic, director at AM Best. Speaking at the Europe Insurance Market & Methodology Briefings in London, Imsirovic discussed how advancements in computing power and data have accelerated AI development to unprecedented levels. He highlighted generative AI, enabled by groundbreaking research like the 2017 ‘Attention Is All You Need’ paper, as a key driver of innovation in insurance applications.

Generative AI can streamline claims processing by transforming unstructured data into usable formats, allowing claims managers to focus on higher-value tasks. Customer service is another area poised for transformation, as modern AI-powered chatbots deliver more natural and efficient interactions. However, traditional machine learning still dominates current AI applications in underwriting, claims processing, and operational tasks.

Imsirovic noted that AI’s impact varies across business lines. Simpler lines, such as personal auto insurance, are more amenable to AI-driven solutions, while complex lines face greater implementation challenges. To unlock AI’s full potential, insurers must invest in robust IT infrastructures that facilitate seamless data integration and system interoperability. These technological advancements could redefine industry operations, enhancing efficiency and customer satisfaction.