Most Impactful Insurance: Top AI use cases
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Dan Latimore is chief research officer of The FR, providing ongoing research and insights on how financial services companies are transforming operations through innovative technologies, including through a recognition program called Most Impactful.
Insurance companies have been going all in on AI to improve operations, speed up claim adjudication and free up employees to focus on value-added tasks. While generative AI has garnered attention in the last two years, insurers are also more aggressively adopting traditional, rules-based AI tools to yield efficiencies.
Through our new research initiative, Most Impactful, we are launching our new analysis of North American insurance companies’ AI rollouts. Based on publicly available data, Most Impactful Insurance: AI recognizes those insurers making a difference through their use of traditional and generative artificial intelligence. Sometimes thought of as a stodgy industry, insurance is actually a prolific user of AI technologies, both traditional and generative.
Insurers are exploring use cases across the AI value chain, from using AI to analyze vast amounts of patient or claims data; generate sophisticated recommendations based on that data; and query using natural language so that both customers and employees can obtain better answers faster.
Where it’s being used
Companies highlighted three broad areas of AI implementation: analysis, generation, and questioning.
AI improves analysis by sifting through, or processing, enormous amounts of data, and by detecting patterns in that data. It frees up analysts and programmers from unnecessary time spent working with data sets and lets them focus on developing insights.
Generation is helpful both for writing the first draft of prose documents (e.g. reports, marketing materials, or plans) and it helps software engineers write and test code. Of course, for both cases, it's crucial to have a human in the loop to oversee machine-generated output. The right governance procedures can help determine the appropriate human-in-the-loop protocols.
With AI deployments, employees no longer need to craft queries couched in painfully exact syntax or dig through layers of menus. Instead, customers and employees can express intent by asking questions in natural language and subsequently refining that intent through ongoing questions in a conversation that takes account of prior interactions.
Most Impactful Insurance: AI, North America, 2024-2025
Stages of development
We divided our honorees into four categories — Titans, Implementers, Mavericks and Digital First — to account for the resource differences among firms of different sizes. While AI impact roughly correlates with size, not all big firms are aggressively pursuing the technology; conversely, many smaller firms punch above their weight and recognize that AI can help boost their competitive positions.
1. AI Titans
These are large firms that have made substantial public commitments to AI. They lead with strong executive commitment, dedicated internal resources and multiple publicly- announced pilots and implementations. Patents and a willingness to push the boundaries of AI capabilities distinguish them.
2. AI Implementers
Members of our largest category, these large and medium-sized firms are experimenting with many use cases. They are doing the hard work of putting into production initiatives that will offer clear ROI, while limiting risks. They’re rolling up their sleeves to implement AI in claims, underwriting and fraud, among other use cases.
3. AI Mavericks
AI Mavericks are typically smaller firms investing in their future by publicly implementing AI in a few focused areas. Instead of experimenting with dozens of initiatives, they focus on implementing a handful of solid projects. Building a foundation for future uses of this evolving technology, they are setting themselves up for continued success.
4. Digital First
Typically newer firms, these companies are extremely comfortable with technology and unencumbered by legacy systems. Using new data architectures, they’re well positioned to use AI across an expansive list of potential use cases, from using geospatial data to assist with underwriting to using machine learning to let customers compare quotes.
Criteria
We recognized Most Impactful honorees by analyzing publicly available data on the insurance industry in North America and narrowing the list down to the top 100 firms.
We assessed six dimensions:
AI spending
Initiatives in production
Vendor relationships
Patents
Executive commitment
Human capital
Unlike many other recognition programs, we didn’t invite submissions. Instead, we did the legwork to see which firms stood out from the pack. Our assessment is as objective as possible because it’s based on publicly available information, thereby avoiding the subjectivity of judging panels.
Characteristics of Most Impactful firms
Looking across the 100 firms who made the list, these industry leaders tend to share four common characteristics.
First, executive commitment underpins ongoing success and is necessary for coordination across the firm. Without that leadership, isolated efforts may succeed briefly, but long-term success could be encumbered by the inertia of business as usual
Second, firms recognize the importance of data. While their data estate likely isn’t perfect today, they recognize that AI success relies on data quality and a consistent approach to data management across the organization. ‘Garbage-in, garbage-out,’ is a cliche for a reason; using AI to accelerate the process does no one any favors.
Third, they show a sense of humility about their AI capabilities. Recognizing that few companies can execute AI strategies on their own, they are willing to consider outside vendors’ offerings. Tech partnerships that are executed well underpin many successful initiatives.
Fourth, we looked at their willingness to challenge the status quo and look at opportunities in process automation, efficiency and personalization. These use cases may not be the most eye-catching, but they represent areas where firms can likely garner a more tangible return on investment.
For more information on this research, we invite you to download the executive summary of the report.
