Embracing Generative AI in the Insurance Industry
Revolutionizing Underwriting: Embracing Generative AI in the Insurance Industry
The insurance industry has often lagged in embracing technological advancements, historically not among the early adopters or leaders in such shifts. Hindered by legacy systems, initiatives like migrating to the cloud have typically unfolded as multi-year journeys, with the realization of business value often on distant horizons.
However, Generative AI presents a departure from this trend. With low productivity, capacity challenges, and critical roles like underwriting often stretched thin, there has been a palpable excitement for a technology like Generative AI. Its ease of adaptation and lower entry barriers have spurred many insurance companies to explore potential use cases and initiate pilot programs eagerly. Let us explore how Generative AI can bring joy back to the profession of underwriting, a function that is critical to the performance excellence of insurance carriers.
Underwriters are responsible for setting the policy’s terms and conditions and determining its pricing. Today, the stakes have never been so high in improving the overall productivity of the underwriters. The fatigue from work overload, talent shortages, and the impending retirement of experienced underwriters are major concerns among the executives of the different insurance lines of businesses. This is compounded by the rising complexity of the job caused by climate change, unstable global geopolitical scenarios, economic fluctuations, and dynamic consumer behavior. The insurance market trends demand that underwriters rapidly respond to shifting market needs and assess risk regularly from myriad data sources.
Thus, underwriting involves more than just pricing risks. The role demands technical, business, and strategic skills along with the ability to make judgments about emerging market trends. Decisions to steer clear of markets with unfavorable conditions are required. For example, Insurers have begun withdrawing from high-risk U.S. states like Texas due to climate-related risks.
Enter Generative AI. The ability of LLMs to spot patterns from a wide array of sources that previously required a human to synthesize can now be used to summarize risk. A Generative AI platform can assess applications for risk compatibility based on a carrier’s underwriting manual. LLMs can free up underwriting from administrative burdens and free up time for strategic thinking.
A start-up that is exactly doing this is Sixfold.AI. The company founded by former Unqork executives promises to reinvent Underwriting by enhancing capacity and accuracy through Generative AI.
Eventually, every insurance company will be an AI company.e beauty of your story is that it’s going to continue to evolve and your site can evolve with it. Your goal should be to make it feel right for right now. Later will take care of itself. It always does.
