More than two-thirds of insurers expect to deploy artificial intelligence in the next two years with the industry now “ready, willing and able” to move towards a technologically advanced future.

That’s the finding of an Earnix survey of 431 insurance executives from Australia, Europe, the UK, US and Canada.

“Insurers reported that they expected the impact of AI to nearly double from the last year to the current year, and then more than triple in the year ahead,” Earnix said. “It adds up to a nearly six-fold increase in insurers’ perception of AI’s impact on their business in just a three-year time frame.”

Less than one-third of insurers currently use AI models that make predictions based on real-time data. Most only use analytics to “validate operational decisions as opposed to generating optimal decisions”, Earnix says.

The tech company says too many insurers still rely on outdated, inefficient systems and may not be moving fast enough to keep up with change.

“Insurers aren’t making as much progress as they may like. Nearly half of insurance companies admit to being behind schedule on their modernisation plans. This may make it difficult for them to implement new, game-changing technologies, especially related to AI, advanced analytics, pricing, rating and underwriting.”

However, the industry is increasing its adoption of new AI-driven capabilities in many areas, and most survey respondents are spending more on regulatory compliance tools this year than last, including 68% of European and Australian insurance companies.

“Insurers in Europe and Australia may have a slight head start when it comes to implementing new technology to help with compliance. These regions reported the highest results in ... time frames and cited ‘implementing new tools and technologies’ as the top reason behind this action,” the report said.

Earnix says most insurers are still at least two years away from bringing their AI and analytics visions to life.  

See the report here.