IBM Study Reveals Mixed Perceptions of Generative AI in Insurance Industry

Perception of generative AI technology in the insurance industry is a bag of mixed feelings

A hot potato: Despite the increasing costs of generative AI investments, companies are still scrambling with the potentially disruptive effects of the new algorithmic paradigm. Enterprise-class executives are more than willing to bet on AI agents, but clients aren't always thrilled about dealing with them. IBM recently shared some notable research regarding the current state of generative AI and its implementation in the insurance industry. Big Blue said there is an apparent "disconnect" between insurance companies' priorities and their customers. However, many consider AI technology essential to keep revenue flowing. The study involved 1,000 insurance c-suite executives in 23 countries and 4,700 insurance customers in nine countries. Opinions among chief executives are almost evenly divided on generative AI outcomes, with 49 percent of the surveyed industry leaders seeing the technology as a risk and 51 percent considering it an opportunity. Seventy-seven percent of executives surveyed said their businesses need generative AI to keep up with their competitors. Investments in AI technology are expected to grow by over 300 percent between 2023 and 2025. Pilot projects are now being implemented in production environments, although business leaders could face a challenging relationship with clients after spamming their carefully trained AI algorithms everywhere. Only a modest 29 percent of insurance customers felt comfortable dealing with AI-powered virtual support, and even fewer people (26 percent) trusted the reliability of their answers. Big Blue still thinks generative AI is good for business, with advanced algorithmic capabilities improving revenue prospects by up to 14 percent. However, the AI bubble could eventually burst, bringing chaos and disruption to Wall Street, a situation many CEOs might welcome, as generative AI has shown to be better at doing their job than they are. IBM has a few recommendations for enterprise clients, although it is likely more interested in selling its AI and cloud solutions than anything else. IBM says insurance companies should use generative AI to build "more tailored" products that are flexible and linked to realistic risk data. They must also address the trust issue, ensuring that their AI behaves ethically and giving local (human) experts the ability to connect the algorithm to the insurance value chain is paramount.

New IBM study: Insurance leaders agree that rapid adoption of generative AI is necessary to compete, but insurance customers express reservations By Investing.com

C-suite executives see generative AI as both a risk and an opportunity , /PRNewswire/ -- New research by IBM (NYSE:IBM)'s (NYSE: IBM) Institute for Business Value identifies a disconnect between how insurers and their customers prioritize the use of generative AI, with industry executives focusing on experience while their clients are seeking personalized risk products and insights. Findings from a survey of 1,000 insurance c-suite executives in 23 countries and 4,700 insurance customers in nine countries are outlined in Generative AI in the Insurance Industry: You Can't Win if You Don't Play. "The insurance industry has made headway in generative AI with customer experience and chatbot enhancements, but insurers must focus on adopting comprehensive governance frameworks that ensure transparency, privacy, and explainability to ensure they are building trusted AI assistants and reliable processes," said , Director of Global Insurance with IBM Technology. "There are also significant opportunities in connecting customers to the right products. Leveraging AI across the enterprise will be critical to improve both customer risk experiences and to implement the underlying IT tools that power those experiences." Download the full report here: www.ibm.com/thought-leadership/institute-business-value/en-us/report/insurance-generative-ai IBM is a leading provider of enterprise AI, hybrid cloud architecture, security and ESG insights to the global financial services sector. Its deep industry expertise, extensive portfolio of services and solutions, and its robust ecosystem of fintech partners, empower collaboration, innovation, and creation with clients. As a trusted partner to banks, insurers, capital markets and payments providers, IBM guides financial institutions on all stages of their digital transformation journeys through IBM Consulting and delivers the proven infrastructure, software, and services they need through IBM Technology. For more information, visit https://www.ibm.com/industries/insurance. Methodology The IBM Institute for Business Value (IBM IBV), in cooperation with Oxford Economics, surveyed 1,000 C-level insurance executives in 23 countries in Q3 2024. 60% of the sample represented pure insurers, 35% bancassurers, and 5% insurance captives of non-financial services and insurance industry organizations selling to the wider insurance market. Participants were asked a range of questions in various formats (multiple choice numerical and Likert scale) about their organization's expectations, results, concerns, and barriers for the use of generative AI in various parts of the organization, as well as relevant technological and business KPIs that allowed a quantitative assessment of the efficacy of these uses. In the same timeframe, the IBM IBV also surveyed 4,700 insurance customers in nine countries, with a minimum of 900 respondents in each country: , , , , , , , , and US. Customers were asked a mirror of some of the questions the above executives received on gen AI benefits and concerns, allowing IBM IBV to gauge agreements and gaps in executive and customer perceptions. The IBM Institute for Business Value, IBM's thought leadership think tank, combines global research and performance data with expertise from industry thinkers and leading academics to deliver insights that make business leaders smarter. For more world-class thought leadership, visit www.ibm.com/ibv. About IBM IBM is a leading provider of global hybrid cloud and AI, and consulting expertise. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Thousands of government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM's hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM's breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and consulting deliver open and flexible options to our clients. All of this is backed by IBM's long-standing commitment to trust, transparency, responsibility, inclusivity and service. Visit www.ibm.com for more information.

New IBM study: Insurance leaders agree that rapid adoption of generative AI is necessary to compete, but insurance customers express reservations - IBM (NYSE:IBM)

C-suite executives see generative AI as both a risk and an opportunity ARMONK, N.Y., Oct. 16, 2024 /PRNewswire/ -- New research by IBM's IBM Institute for Business Value identifies a disconnect between how insurers and their customers prioritize the use of generative AI, with industry executives focusing on experience while their clients are seeking personalized risk products and insights. Findings from a survey of 1,000 insurance c-suite executives in 23 countries and 4,700 insurance customers in nine countries are outlined in Generative AI in the Insurance Industry: You Can't Win if You Don't Play. "The insurance industry has made headway in generative AI with customer experience and chatbot enhancements, but insurers must focus on adopting comprehensive governance frameworks that ensure transparency, privacy, and explainability to ensure they are building trusted AI assistants and reliable processes," said Mark McLaughlin, Director of Global Insurance with IBM Technology. "There are also significant opportunities in connecting customers to the right products. Leveraging AI across the enterprise will be critical to improve both customer risk experiences and to implement the underlying IT tools that power those experiences." Key Takeaways Insurance CEOs surveyed were almost evenly divided on whether they see generative as more of a risk (49%) versus an opportunity (51%)77% of industry leaders who responded acknowledge that generative AI is necessary to keep pace with competitorsInvestments in gen AI are expected to surge by over 300% from 2023 to 2025 as organizations move from pilots in one or two areas to implementations in multiple functions across business linesOnly 29% of insurance customers queried said they are comfortable with gen AI virtual agents providing service, with only 26% saying they trust in the reliability and accuracy of advice given by generative AIOrganizations choosing less-centralized operating models to develop gen AI capabilities can improve business outcomes by up to 14% Recommendations Build more tailored products with flexibility, advice, and linkage to risk dataMatch those products intelligently to customers' needsAddress trust issues with strongly ethical, governed AIAlso use AI to connect the underlying risk data and address long-standing insurer and financial service provider technical debtDeploy - and govern - AI across the enterprise with local knowledge experts empowered to connect AI to the insurance value chain Download the full report here: www.ibm.com/thought-leadership/institute-business-value/en-us/report/insurance-generative-ai IBM is a leading provider of enterprise AI, hybrid cloud architecture, security and ESG insights to the global financial services sector. Its deep industry expertise, extensive portfolio of services and solutions, and its robust ecosystem of fintech partners, empower collaboration, innovation, and creation with clients. As a trusted partner to banks, insurers, capital markets and payments providers, IBM guides financial institutions on all stages of their digital transformation journeys through IBM Consulting and delivers the proven infrastructure, software, and services they need through IBM Technology. For more information, visit https://www.ibm.com/industries/insurance. Methodology The IBM Institute for Business Value (IBM IBV), in cooperation with Oxford Economics, surveyed 1,000 C-level insurance executives in 23 countries in Q3 2024. 60% of the sample represented pure insurers, 35% bancassurers, and 5% insurance captives of non-financial services and insurance industry organizations selling to the wider insurance market. Participants were asked a range of questions in various formats (multiple choice numerical and Likert scale) about their organization's expectations, results, concerns, and barriers for the use of generative AI in various parts of the organization, as well as relevant technological and business KPIs that allowed a quantitative assessment of the efficacy of these uses. In the same timeframe, the IBM IBV also surveyed 4,700 insurance customers in nine countries, with a minimum of 900 respondents in each country: Australia, Canada, China, France, Germany, Hong Kong, Japan, UK, and US. Customers were asked a mirror of some of the questions the above executives received on gen AI benefits and concerns, allowing IBM IBV to gauge agreements and gaps in executive and customer perceptions. The IBM Institute for Business Value, IBM's thought leadership think tank, combines global research and performance data with expertise from industry thinkers and leading academics to deliver insights that make business leaders smarter. For more world-class thought leadership, visit www.ibm.com/ibv. About IBM IBM is a leading provider of global hybrid cloud and AI, and consulting expertise. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Thousands of government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM's hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM's breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and consulting deliver open and flexible options to our clients. All of this is backed by IBM's long-standing commitment to trust, transparency, responsibility, inclusivity and service. Visit www.ibm.com for more information. Media Contact Mary Ellen Higgins IBM Global Financial Services Industry External Communications [email protected] m +1.781.789.1911 View original content to download multimedia:https://www.prnewswire.com/news-releases/new-ibm-study-insurance-leaders-agree-that-rapid-adoption-of-generative-ai-is-necessary-to-compete-but-insurance-customers-express-reservations-302277082.html SOURCE IBM Market News and Data brought to you by Benzinga APIs