Insurers Embrace AI for Enhanced Customer Experience and Fraud Detection
The insurance industry is embracing artificial intelligence (AI) to enhance customer communication, detect fraud, and streamline claims settlement. A recent survey reveals that 17 out of 19 insurers offer at least one AI module, with data analysis and claims management being the most popular applications.
The shift towards AI is driven by strategic significance, with 81% of insurers recognising its potential, particularly in policy administration and claims management. Larger insurers, such as Allianz, Munich Re, and Talanx, are leading the way by undergoing system changes to adopt modern, AI-supported software solutions. Allianz uses modules from IBM Watson and Microsoft Azure AI, while Munich Re employs proprietary AI alongside partners like SAS and Google Cloud AI. Talanx, on the other hand, integrates AI technologies from IBM and local startups.
The EU AI Act, following the Digital Operational Resilience Act (DORA), poses the most relevant regulatory challenge for insurers' IT strategies. Despite challenges like outdated core systems and lack of internal resources, almost half of the providers plan to add more AI functionalities in their next release. Tobias Kohl, Partner at PPI AG, predicts that insurers systematically introducing AI will gain a competitive edge in the coming years.
The insurance sector is increasingly adopting AI to improve operations and customer experience. With strategic significance recognised by a majority of insurers, the industry is poised for transformation, led by the largest players and supported by software providers offering AI modules and integration points.
