Artificial intelligence and the promise of innovation that the technology brings with it has many insurance professionals doubling down on investments for 2025, but the risks lurking in the background have left organizations cautious, according to new data from Digital Insurance.
Big data and analytics were the second highest with 28%, followed closely by cloud and digital infrastructure with 26% of respondents.
When asked what stage their respective firms were at in regards to generative AI adoption, the majority of those who work for carriers and agencies/third-party firms were still in the speculative days of exploring the technology, with 30% and 41% respectively. The greatest share of health insurance/payer experts, about 37%, said their organizations have instances of tools powered by generative AI already in full production.
"A common misstep we see is in organizations trying to join [the] AI bandwagon in all areas—without understanding the technology's applicability. … Application AI should be prioritized in areas where there is a large set of transactions and content, feedback loops and repetitive tasks with limited subjectivity," said Abhishek Mittal, vice president of customer information management and operational excellence for Wolters Kluwer Financial & Corporate Compliance.
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Complications can arise especially when AI is brought into the claim determination process, as evidenced by the
A spokesperson from Optum responded that the tool in question, known as the naviHealth predict tool is not used for coverage determinations, but rather as a "guide to help us inform providers, families and other caregivers about what sort of assistance and care the patient may need both in the facility and after returning home."
Further findings from the
Following the assassination of UHC Chief Executive Brian Thompson, the company responded in a
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Dive into expert predictions for what 2025 will bring to the AI landscape in the insurance industry below.
AI, predictive care to top list of health-tech predictions for 2025
The growth of artificial intelligence-powered diagnostics,
In speaking with Digital Insurance, Gary Coffey, industry expert and chief technology officer at the Ireland-based healthtech firm Spectrum.life, said a key piece of the trend involves connecting the disparate list of steps surrounding patient care through digital platforms and other tools.
"Predictive insights will take center stage, transforming raw data into clear, actionable explanations that enable healthcare providers and insurers to make informed decisions," Coffey said. "This approach represents a move from traditional, reactive healthcare models to preventive, user-focused strategies."
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A look into the insurtech startup Ric
Stemming from a conversation between herself and her unnamed cofounder, Nakita Devlin was driven by the lack of options for sufficient catastrophe coverage to launch Ric, a parametric insurance firm, in 2023.
Devlin brings with her roughly 15 years of experience in the insurance industry, working in firms like Cooper Gay Swett & Crawford, CRC Swett, Innovisk Capital Partners and Willis Towers Watson. While at WTW, her work building a core technology platform for a startup led her to meet her cofounder, whose experience in catastrophe modeling and underwriting meshed well with Devlin's skillset.
When the two were in the middle of buying their respective homes, a discussion about inadequate catastrophe coverage led to the development of Ric. The company debuted its first insurance product earlier this year, tailored to provide coverage for rainfall and flood events.
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How insurers can clear the murky waters of AI adoption
When it comes to the divide between AI experts and insurance firms lagging behind in adoption, industry experts say establishing clear guidelines for what to expect out of the technology and laying out the steps for accomplishing set goals can get to the heart of the gap.
Raj Mohanty, a managing principal at Capco, spoke with DI on addressing the growing AI readiness gap in insurance, how the technology will shape the future of the workforce in the insurance industry, whether or not adopting AI tools are worth it for certain firms and more.
"AI and automation are reshaping the insurance industry by streamlining processes, improving efficiency and enabling better decision-making," Mohanty said. "While these create new opportunities, they also impact certain roles."
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Davies' head of premium audits weighs in on AI's role in pricing
Experts with Davies, a professional services and technology firm that works in the U.K., Ireland and U.S. markets, spoke with DI about the importance of premium audits for commercial insurers to gut check whether or not the premiums associated with liability, casualty and workers compensation coverage match the risks.
Mark de Waal, head of premium audit at Davies, said the audit process began in the '90s with transitioning written documents to computers and eventually transitioned to shifting many processes onto the internet.
"With AI, 3.0 is where we're at right now," de Waal said. "One of the biggest hold ups and problems with audit is that oftentimes you could be mired with just an incredible amount of data to be able to sift through, to distill and to report on, and so the auditor spends a lot of time in the trees. … What they're not doing is looking at the forest."
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Can insurtech help insurers defuse nuclear verdicts?
Insurers are facing an increasing number of Nuclear Verdicts, which are court decisions exceeding $10 million or where non-economic damages don't match up with the economic damages and the facts portrayed in a case. Industry experts say AI use among plaintiffs is to blame, but aren't ruling out using the technology themselves.
The double-edged sword of AI in insurance can be enticing for insurers, as possible vulnerabilities from integrating new technologies goes up against the efficiency boost that it promises, said Denise M. Tyson, chief executive and founder of the San Diego-based insurtech Schaefer City Technologies.
"What if the insurer was not surprised by a nuclear result [or] what if the insurer adapted by using new technology," Tyson said. "What if claims professionals were alerted early in the life of a file, and periodically throughout it, of the file's risk of going nuclear?"
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