Generative AI will give underwriters a competitive edge

We're living in an exciting phase of technological advancements, and the insurance industry has great tools at its disposal. It's time to start using them, say executives from professional services and solutions firm Genpact.

As companies grapple with new technologies, it is becoming abundantly clear that artificial intelligence (AI) and its offshoot, generative AI (gen AI), are emerging as transformative game changers across industries.

In an exclusive interview with Intelligent Insurer, Suhas Sethi and Manoj Kumar from Genpact shared their perspectives on the transformative potential of gen AI in insurance, the challenges faced by insurers, and how to overcome these obstacles.

Sethi, a global business leader for insurance, introduced the topic with evident passion, saying, "Gen AI is a wonderful new change, which is going to shake up quite a few things."

Kumar, global head of data and AI for banking, financial services, and insurance (BFSI), who has more than 25 years of experience in the industry, echoed this sentiment, saying, "I am very excited about how the industry is adopting these changes and embracing tools for better customer service and experience."

According to Genpact's research, The gen AI countdown, insurers rank competitive advantage as the primary benefit of gen AI, followed by new revenue streams and business models, then productivity.

Sethi commented: "A lot of people think that gen AI would be predominantly driving productivity and efficiency, but what we find is that it's helping with competitive advantage."

He stated that with more companies using AI, pricing competitiveness will give way to product competitiveness.

"We know that by creating new products and making them far more individually customized for the clients, gen AI can provide a huge amount of benefit," Sethi added.

Kumar agreed: "Gen AI provides the advantage of churning out large unstructured data sources much more quickly and more comprehensively than before.

"This is going to change the way underwriters explore external or unstructured data for additional information."

"Gen AI is going to bring the competitive advantage for which underwriters have been waiting for a long time," he added.

Despite the promised benefits, insurers face several barriers to effectively adopting gen AI, according to Genpact's research, including a lack of structured plans and investments and challenges with data quality and strategy.

"Data quality and access are the most integral part of AI technology," Sethi said.

"A lot of our clients and the industry per se have started to get into the blueprinting and data cleansing and are modifying how their data is structured, stored, and accessed to be ready for this transformation to happen."

Kumar added: "If you look at the gen-AI solutions that the industry is adopting, it has a huge dependency on the quality of data.

"We are seeing carriers now focusing on the quality of their data, including its various facets of completeness."

Kumar described what other companies are doing to overcome these barriers. "More clients are trying to form gen-AI centers of excellence to identify the right use case and a roadmap to implementation," he explained.

Genpact has led several impactful examples of gen-AI adoption among insurance companies.

"We are deploying programs that are transforming the way our associates access their operating procedures," said Sethi.

He highlighted domain-specific applications to address the onerous and manual process of assessing claims, especially when a home has been damaged. "We've created programs and algorithms in gen AI that are changing how claims are handled in a completely non-manual way."

Kumar elaborated on the underwriting process: "We've improved the very manual and scattered process of specialty and commercial underwriting submissions with gen-AI technology, and we've encircled that technology through other automation and extractions."

Another significant barrier is the difficulty in finding, training, and retaining talent with AI skills.

This is another area where a center of excellence can help by bringing together and training the right talent to support the business on gen AI.

Training is important for Genpact, too. "Over the last year or so, we've trained nearly 70,000 of our associates on gen AI and AI technologies," Kumar said.

Sethi and Kumar strongly believe that gen AI is set to revolutionize the insurance market over the next 5 to 10 years.

"We have witnessed an extraordinary speed of change, where now we have the visual imagery coming," Sethi said.

He painted a picture of the future. "Imagine complex commercial underwriting being done in minutes and providing quotes back to small commercial or middle markets within a matter of minutes – that's the future we're looking towards because it's all going to change," he concluded.

Watch the full discussion here:

The article first appeared in Intelligent Insurer. Michele Bacchus, associate editor at Intelligent Insurer, interviewed Suhas Sethi, global business leader for insurance, and Manoj Kumar, the global head of data and AI for BFSI at Genpact.