Artificial intelligence is becoming a looming presence over the life insurance field, signaling one of the largest in a wave of tech-focused changes coming to the industry.
But with a sector as highly regulated as insurance, firms are left wondering how, and when, AI-powered tools can advance.
Automation is top-of-mind in many of these conversations, as evidenced by the 55% of respondents who identified new technologies like AI, machine learning and blockchain as the top trend impacting insurers over the next one to three years.
Those that implement AI tools can "create a competitive advantage when it comes to attracting and retaining talent, especially from younger generations," Ryan Baillargeon, insurance industry lead at Glia, said in the report.
"The conversation around AI will shift from initial research and proof-of-concept phases to widespread implementation and value realization," Baillargeon said. "The real winners will be those who harness AI to optimize processes and reduce operational costs."
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Popular use cases extend to claims processes (36%), customer service (23%) and even underwriting (16%), according to the report.
But AI and GenAI use isn't without its risks. Hallucinations were the number one risk identified by insurance experts in the report with 51% of respondents in agreement. Regulatory struggles from lack of model explainability garnered 46% and increased risk of data leaks got 43%.
Firms like the Canadian insurance firm Manulife, which operates in the U.S. as John Hancock, have been some of the leaders in AI adoption over the last decade or so.
Jodie Wallis, the global chief analytics officer at Manulife, told Digital Insurance that the combination of classical AI with GenAI has yielded the most progress with the technology and helped improve "straight through processing rates" and other business functions.
"GenAI is definitely a key lever in digital transformation, not the only lever, but it's a key lever," Wallis said. "I think the language that is used to discuss insurance, the story gets easier to tell with GenAI."
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Dive into how GenAI adoption is impacting the insurance industry and other new changes in the life insurance markets.
How insurtech founders are bringing empathy into the fold
When Ron Gura co-founded the life insurance technology firm Empathy with Yonathan Bergman in 2020, the mission was to collaborate with life insurers by providing estate settlement services and support services for bereaved beneficiaries. Roughly five years later, the work hasn't stopped.
Empathy helps consumers create and maintain care plans with dedicated care managers, but goes a step further to offer tools for drafting obituaries, handling estate settlements and other complex processes ingrained in life insurance policies.
"We proved that if you shift from a transaction to a relationship, people will never forget what you did for them," Gura told Digital Insurance. "We're seeing how this connects to everything else that is happening in the industry, a relatively antiquated industry that is looking for innovation, looking for customer experience [and] looking for more engagement during what we all know is the greatest wealth transfer in history."
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Economic forecasts, caregiving impede female retirement savings
New data from the Nationwide Retirement Institute found that both a shaky economic future and familial responsibilities are major factors hindering how effective women of all ages are able at saving for retirement.
Findings from the
"It's understandable that women investors, who often serve as primary caretakers for their family, feel challenged by the current economic environment and the pressures of taking care of their loved ones," Suzanne Ricklin, vice president of retirement solutions sales for Nationwide, said in a statement.
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Does AI belong in life insurance underwriting?
Brett Laker, head of North America for Underwrite Me, told DI in a recent podcast that artificial intelligence will greatly impact underwriting, claims and product development or mortality assumptions in the coming years.
"So there's this fear of being left behind by peers and competitors, particularly if you're looking at the C-suite and they're getting recommendations from the subject matter experts, that can be really great because it can foster a faster adoption of new innovations," Laker said. "However, it can also be a problem because if you cut corners on assessing the impacts and the implications, then you might trip up over yourself."
He emphasized that AI has the ability to take over the "mundane and laborious" tasks for insurance agents, but the highly-regulated nature of the insurance industry is a big hurdle to clear for further adoption.
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U.S. subsidiary of Dai-ichi Life to cede $9.7B insurance blocks
Protective Life Corp., a wholly-owned division of Dai-ichi Life Holdings Inc., agreed to part with roughly $9.7 billion worth of policy reserves as part of a play to boost earnings.
The Birmingham, Alabama-based Protective Life is ceding the insurance blocks to reinsurance firm Resolution Life Group Holdings Ltd., which Dai-ichi hopes will improve its $30 to $40 million adjusted profit in the medium to long term, the company told Bloomberg News.
Terms of the deal will keep assets with Protective Life, but see Resolution Life reap the income and expenses that include investment gains and losses.
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The pros and cons of life insurance as a tax asset
The boons of life insurance policies are available to wealthy households, providing tax-free liquidity in times of need, serving as collateral for loans and helping with estate planning — all of which come with a cost.
High premiums costs associated with "whole life" or "permanent" policies are an upfront hurdle to clear for those seeking to build a life insurance strategy. Regulations on trusts and estates that are
"The tax attributes alone make it a very successful product in someone's financial plan from a tax perspective," Peter Harjes, a certified financial planner who is the chief financial strategist with life insurance and estate services firm
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