Life insurance CIOs are always looking for ways to improve efficiency, reduce costs, and better serve customers. Generative AI technology—which you’ve surely seen in the news recently—has significant potential to transform many aspects of the life insurance business.
What is generative AI exactly? It refers to AI systems that can generate new content, rather than just classify, match, or modify existing content. Examples include models such as GPT-3 from OpenAI and Claude from Anthropic. They can produce remarkably human-like text, code, images, and more from simple prompts.
Three key areas where generative AI could benefit life insurers come to mind immediately:
- Automating policy documents and paperwork: One of the less glamorous but crucial functions in insurance is producing reams of policy documents and paperwork. Generative AI excels at generating text for contracts, reports, regulatory filings, and more. This could significantly reduce the manual effort currently required for documentation. Concise, accurate paperwork helps cut costs and ensures compliance.
- Speeding up and enhancing underwriting: Underwriting is time and labor intensive, relying on assessing applicant medical records, lab results, and health history. Generative AI can be trained on industry data to automatically summarize and extract insights from medical documents to help underwriters. This saves time and reduces human bias and errors. Fewer back-and-forth delays improves customer experience.
- Creating personalized customer interactions: Each customer interaction—whether a policy explanation, renewal notice, or claim assistance letter—represents an opportunity to build trust and loyalty. Generative AI can generate customized communications tailored to the customer’s policy, background, and previous interactions with the insurer. This level of personalization promotes higher engagement and satisfaction. Insurers should note that sensitive interactions are still best handled by human customer service agents. AI is best used for personalizing the mundane-yet-necessary interactions that make up the bulk of policy servicing.
Generative AI can be an assistant to many roles and functions. As with any new technology, there are risks to be evaluated regarding data privacy, security, and bias in the AI systems. However, the potential productivity and innovation gains make this an area worth exploring and monitoring closely.
CIOs have a unique role to play in responsibly piloting generative AI to transform life insurance for the better. If you’re curious on how to get started, you can read our report on the top 5 questions CIOs have about GenAI, or contact me directly.