As many as 80% of insurance brokers have yet to implement AI into their business, new research reveals.
- Most brokers believe AI will change how they operate
- National brokers are more advanced on AI implementation and clearer on the benefits
- Wide usage from customer communications to risk presentations and comparing policy wordings
As many as 80% of insurance brokers have yet to implement artificial intelligence (AI) into their business, new research reveals.
The study, commissioned by insurance technology partner Open GI, found a gulf between the progress of national brokers and smaller regional firms when it comes to gaining an advantage from early AI adoption.
As many as 45% of national brokers said they had implemented some AI initiatives and that there were more to come, compared with just 9% of regional and provincial brokers. Only 2% of national brokers reported that their AI strategy was mature and complete.
A third of the smaller brokers polled said they were exploring AI but had not implemented anything yet, and a further 57% have yet to make a start.
Across all 207 broking firms, the consensus was that AI would change the industry. Only 12% strongly agreed with that “AI talk is mostly hype”.
The research found national brokers are more alert to the risk of doing nothing. Half of them strongly agreed that ‘organisations that don’t use AI will be left behind’, compared with 25% of regional and 21% of provincial brokers.
Only 5% of regional and provincial brokers strongly agreed that AI adoption was a core business imperative in the next 12 months, compared with a quarter of national brokers.
Brokers were more likely to adopt a wait and see approach as two-in-five strongly agreed with the statement ‘AI could be interesting, but I want to wait and see how it develops before investing in it’.
National brokers were clearer on benefits of AI. They were four times more likely to view AI as something that would reduce their cost base (41% strongly agreed vs 11% of provincial and 8.4% of regional brokers). They were also likely to believe that AI would make them more responsive to clients and new opportunities (22% strongly agreed, vs 11% of regional and 12% of provincial brokers).
Broad uses
The broking firms which are already deploying AI reported a wide range of uses. The most common are marketing and communications and back-office automation. Firms are also using AI to assist more technical operations. More than 30% stated they use AI to compare policy wordings, a further 24% use it to summarise client files and 16% to develop risk presentations for insurers. Other uses include sourcing fresh revenue streams and identifying cross-selling opportunities and lead generation.
Peter Hunter, head of research & development at Open GI, commented: “It’s a fact that artificial intelligence is moving fast and there is huge potential for brokers to use itas a tool to write more and better business. It isn't a Terminator-esque spectre rising to do hard-working brokers out of a job. Instead, it offers a series of tools to help brokers with content creation, automation of repetitive tasks, analysis, and tools to help policy holders find information quickly. It presents a huge opportunity, if used correctly.”
Getting started
Brokers identified knowing where to start, data security concerns, and difficulty measuring a return on investment as the top three barriers to adopting AI.
Hunter continued: “Cyber security is something brokers are absolutely right to be thinking about in the context of AI adoption. Introducing AI often means processing client data in new ways and potentially creating new vulnerabilities, whether in the data pipelines or the algorithms themselves. But it shouldn’t act as a deterrent to implementation. By working with the right partners, who understand the risks and know how to mitigate threats, brokers can move forward with confidence.”
Additionally, integrating with existing systems was a bigger concern for smaller brokers, with 54% describing this as a barrier compared with 26% of the largest brokers.
Ben Legg, chief product officer at Open GI, commented: “It’s clear there is a role for software partners to support brokers to connect to new AI systems and break down those barriers to entry. It’s our job to help our brokers and MGAs find and implement the appropriate tools that will augment their people and processes.
“It is a really exciting time, and, with the right support brokers of all sizes can take the bull by the horns and successfully use AI to drive productivity and grow their business.”
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