“Insurance leaders need a clear strategy to unlock value and achieve AI driven transformation and achieve long-term success, one that involves not only integrating AI into their existing systems but also fostering a culture of innovation and adaptability. By doing so, they can respond swiftly to insurance market changes and customer demands, leveraging AI to offer personalized and efficient services,” Frank Pfaffenzeller, Global Head of Insurance, KPMG International
KPMG International has unveiled new research – Intelligent insurance: A blueprint for creating value through AI-driven transformation.
The new KPMG research takes a close look at the insurance industry and outlines key high-level capabilities for an AI empowered, customer-centric insurer. While many organizations are excited about the opportunities offered by artificial intelligence (AI), and seek to move beyond the hype cycle, numerous challenges to effective implementation remain.
The report reveals that insurance organizations should establish robust AI frameworks to define accountability standards, address risks, and integrate privacy considerations into every stage of AI development. Additionally, it recommends for insurers to invest in advanced security measures to prevent threats and develop tools for continuous auditing of AI models to detect unintended biases, thereby enhancing credibility and compliance. The lessons for leadership are clear.
While outdated legacy systems, ingrained working practices, concerns about AI-specific risks and regulatory compliance, and skill shortages can slow progress, analysis from this new KPMG research offers a blueprint to strategically address these barriers and effectively transform any customer-centric enterprise, with three essential phases of AI transformation categorized as Enable, Embed and Evolve.
“Insurance leaders need a clear strategy to unlock value and achieve AI driven transformation and achieve long-term success, one that involves not only integrating AI into their existing systems but also fostering a culture of innovation and adaptability. By doing so, they can respond swiftly to insurance market changes and customer demands, leveraging AI to offer personalized and efficient services,” said Frank Pfaffenzeller, Global Head of Insurance, KPMG International.
“It is imperative to rethink the role AI can play and change your operating model accordingly.”
Kailash Mittal, Partner FRM, Head – Insurance & Head – Actuarial, KPMG in India says, “The insurance industry is going through a transformative journey, with the entire ecosystem looking at coming together integrating transformation, digitization, insurtech and artificial intelligence (AI). This amalgamation of sorts, will be crucial for ‘Insurance for all by 2047’ and aid intelligent integration across all the stakeholders – policyholders, distributors, insurers and the Regulator.”
Sanjay Doshi, Partner and Head, Transaction Services and Financial Services Advisory, KPMG in India says, “The insurance industry is undergoing a significant transformation, with companies integrating sophisticated digital transformation models to incorporate artificial intelligence (AI). Given the pivotal role that the insurance sector plays in India, it is crucial for these companies to harness advanced technologies for AI adoption. By embedding intelligence across value streams, they can ensure seamless customer interactions and robust risk management.”
The research highlights the need for increasing maturity across the three phases, expanding the capabilities integral to the foundations, functions and enterprise layers, simultaneously. And while the report focuses on the framework necessary, the blueprint does not omit the ‘soft’ skills required to create value in any AI-fuelled transformation.
Furthermore, research suggests that insurance leaders must prioritize developing a strategic roadmap that integrates AI initiatives across their organizations to ensure measurable outcomes and alignment with their long-term objectives.
The new report forms part of a series of eight sector specific reports based on research conducted with almost 1400 industry leaders, across key global markets and industry sectors, including insurance, where executives reveal the steps, they are taking to dismantle legacy barriers and position their organizations for an AI-driven future.