An ability to adopt a coming wave of insurtech will be key to survival for insurance industry firms, Frazer Walker Partners Ian Chisholm and Nick Careless say, while insurers that don’t embrace technology “face extinction”. 

Machine learning (ML), artificial intelligence (AI) and robotic process automation are not yet revolutionising the insurance industry, the Sydney-based consultants say. 

But they are not far away and the industry is on the cusp of massive change through such insurtech advances. 

"Industry participants’ ability to adapt to and adopt the wave of insurtech that’s rapidly approaching will be the key to their survival. Insurance organisations that stick their heads in the sand risk drowning as the wave passes over them, while the innovators surf towards success,” a Frazer Walker whitepaper entitled ‘Insurers must surf the insurtech wave to survive’ says. 

Insurtech can help improve product development, distribution, rating functions, claims and customer management, and administration, Mr Careless says, and is inevitably flowing on from advances in frontrunner banktech. 

“Competition is fierce, the pace of change relentless, and increasing regulatory compliance mandates continue to erode scarce capital. Concurrently, customers are demanding high-tech, easy-to-use digital solutions,” Mr Careless says.  

In medical insurance, there’s some use AI and ML in diagnostic and recovery steps. In claims, there are some advances in using digital tech to supply images that AI and ML can then review to improve processing efficiencies.  

"In general, though, insurers themselves are not heavily investing in AI and ML tech and what’s available is still immature in the way it interprets data. Implementing co-pilot services to assist underwriters and sales and claims staff navigate to the correct screens and pre-populate fields is a focus area.”  

Other generative AI use cases are being investigated, and the insurance industry is seeing increased AI use in peripheral systems such as document management and support for personalisation. AI is also being used to build a coach for internal staff, growing insurance knowledge to enable it to advise underwriters when they face new challenges. 

“The technology is not advanced yet, but money’s being invested in it,” the consultants say. 

See the report here.