**The Value of Generative AI for Insurance Companies and Their Customers**
Insurers face challenges in maintaining profitability, complying with regulations, and competing with other financial services entities. Many are slow to adopt new technologies, but the use of generative AI could be key to their digital transformation. IBM’s work with insurance clients and studies by IBM’s Institute of Business Value (IBV) have shown that digital orchestration, core productivity, and flexible infrastructure are driving insurer management decisions. Generative AI, combined with traditional AI, is crucial for core modernization in areas such as IT infrastructure operations, customer interactions, and back-office functions. It can also play a significant role in digital transformation, paving the way for automation, self-service channels, and cognitive process automation. The incorporation of ChatGPT capabilities, foundation models, and self-supervised learning has the potential to revolutionize AI training and usage in the insurance industry. Generative AI can benefit insurers in various domains such as summarization, classification, generation, extraction, and question-answering, leading to enhanced productivity and performance improvements.
**Role of generative AI in digital transformation and core modernization**
Insurance companies are embracing digital transformation and core modernization to address challenges such as regulatory compliance, competitive pressure, and customer expectations. The incorporation of generative AI, combined with traditional AI capabilities, is seen as a critical aspect of this transformation. Generative AI can contribute to making IT operations and DevOps more productive, thus improving overall efficiency and productivity. By leveraging a hybrid multicloud approach and best-in-class security measures, insurers can accelerate their journey toward core modernization, enabling them to better cater to the needs of their customers.
**Digital transformation with AI**
The digitization of insurance processes is on the rise, with a focus on reducing costs, improving customer experiences, and embracing automation. The introduction of generative AI, such as foundation models and self-supervised learning, has opened up new possibilities for cognitive process automation and enhanced data management. It has also enabled insurers to gain deep insights, improve underwriting decisions, reduce fraud, and control costs.
Generative AI capabilities can be applied in various domains such as summarization, classification, generation, extraction, and question-answering, leading to significant productivity gains and improved performance across different segments of the insurance business.
**1. How can generative AI improve the insurance industry?**
Generative AI can contribute to core modernization and digital transformation in the insurance industry by enhancing productivity, efficiency, and customer experiences through automation, data management, and cognitive process automation.
**2. What are the key domains in which generative AI can be applied in insurance?**
Generative AI can be utilized for summarization, classification, generation, extraction, and question-answering in the insurance industry, leading to improved processes and productivity gains.
**3. How does generative AI differ from traditional AI?**
Generative AI goes beyond traditional AI by enabling self-supervised learning, which reduces the need for intensive human effort in training and enables quicker and more efficient learning.
**4. How is IBM contributing to the adoption of generative AI in insurance?**
IBM has been working with insurance clients to implement generative AI and traditional AI capabilities, as well as providing advanced data architectures and automation software on cloud to drive digital transformation and core modernization in the insurance industry.
**5. What are the potential benefits of using generative AI in insurance processes?**
The use of generative AI in insurance processes can lead to significant productivity gains, improved customer experiences, and streamlined operations across various segments such as HR processes, customer care, and legacy code modernization.
**6. Can generative AI be used to address regulatory compliance in the insurance industry?**
Yes, generative AI can contribute to addressing regulatory compliance by enabling secure and efficient data management while complying with industry regulations, leading to improved underwriting decisions and reduced fraud.
**7. How can insurance companies get started with implementing generative AI?**
Insurance companies can explore the use of generative AI by partnering with technology providers such as IBM, leveraging platforms and tools that offer generative AI capabilities, and ensuring the alignment of AI initiatives with their business objectives.