Artificial intelligence (AI) is set to become an essential tool for data-centric industries, including insurance. The *Allianz GenAI 2024* report highlights the potential impact of AI across the value chain, particularly in areas such as risk assessment, claims management, and fraud detection. However, fears remain, particularly with regard to employment and skills inequality, issues that divide the public and experts alike.
Perceptions of AI
According to a survey conducted in six European countries, around 46% of respondents expect AI to reduce the number of jobs available, while only 33% foresee an increase in professional opportunities. This fear is particularly pronounced among the less qualified, who fear that the adoption of AI will exacerbate existing inequalities. On the other hand, industry experts argue that the automation of repetitive tasks would enable employees to focus on higher value-added tasks, which could ultimately create new, more specialized job opportunities.
AI, a lever for productivity
One of the most promising aspects of AI is its potential to improve productivity in the insurance industry. The report states that the adoption of AI-based technologies could lead to a 1.5% annual increase in productivity, thanks in particular to automation and predictive analytics tools. These technologies would enable insurers to process greater volumes of customer data and react more quickly to requests, while reducing operational costs.
One of AI's flagship applications is claims management, where AI can speed up damage assessment in real time and reduce the risk of fraud. What's more, the personalization of insurance offers, thanks to predictive analytics, would enable insurers to tailor their products to customers' specific needs, thereby increasing their satisfaction and loyalty.
Limited job cuts
Although automation may lead to a reduction in the workforce, the Allianz report notes that the overall impact on insurance employment is likely to be moderate. In fact, a 0.622% increase in productivity would only lead to a reduction in the workforce of around 1%. This figure is explained by the fact that many tasks in insurance, such as customer relationship management and complex risk analysis, still require human expertise.
One of the key challenges will be to ensure a successful transition, banking on the training and reskilling of current employees. The adoption of AI must not result in an outright reduction in the workforce, but rather in an improvement in skills, enabling employees to use these tools to increase their productivity.
AI use cases in insurance
The report highlights several concrete applications of AI in the insurance sector, some of which are already being successfully implemented. AI makes it possible, for example, to personalize insurance policies based on customer behavioral data, thanks to predictive analytics tools. This also includes innovations in underwriting, where AI can rapidly adjust premiums based on real-time risks.
Another use case is claims management. Thanks to image recognition and data analysis, insurance companies can process claims faster and more accurately. AI can also detect fraud more effectively, representing a major step forward in reducing the costs associated with fraudulent claims.
In risk management, AI also plays a key role in enabling more in-depth analysis of trends and anomalies, helping insurers to offer products that are better tailored to their customers' needs. This personalization, combined with predictive marketing tools, improves customer engagement, offering faster and more relevant services.
Productivity and regional disparities
The Allianz report also reveals that AI adoption varies considerably from country to country. For example, countries such as Germany and Austria have seen notable increases in productivity in the insurance sector, as measured by the ratio of written premiums to the number of employees. This increase is less marked in other countries, such as Italy and Poland, where the adoption of AI is slower.
This disparity can be explained by structural factors specific to each market, but also by companies' degree of technological readiness. Countries that have invested heavily in digital technologies and automation are better placed to take advantage of AI and improve their productivity.
A response to demographic challenges
AI could also play a key role in responding to the demographic challenges facing Europe in the coming decades. According to the report, the working-age population is set to shrink by 20% in the European Union by 2050. AI could compensate for this shortage by automating certain administrative tasks, allowing the remaining workers to focus on more skilled tasks and keeping the sector competitive.
Despite these opportunities, the question of employment remains central. Allianz suggests that the key to success lies in a balance between technological innovation and job protection, ensuring that the adoption of AI is not to the detriment of workers, but rather seen as a complement to their skills.
Regulation and competitiveness
One of the major challenges for the sector will be to strike a balance between innovation and regulation. According to the survey, 48% of respondents believe that strict rules are needed to frame the use of AI, while 32% think that lighter regulation would be preferable to preserve the competitiveness of the European market. The debate on AI regulation is likely to continue in the years to come, as it is crucial to protect consumers while enabling companies to innovate and remain competitive.
In addition, companies will need to invest in reskilling their employees to ensure they are well prepared to use these new technologies. The adoption of AI in insurance should not be seen simply as a cost reduction, but as an opportunity to create new customer experiences and generate significant productivity gains.
The *Allianz GenAI 2024* report highlights the enormous potential of AI to revolutionize the insurance industry. From claims management to fraud detection to offer personalization, AI offers major opportunities to improve efficiency and productivity. However, these technological advances come with challenges, particularly in terms of employment and regulation. The successful adoption of AI in this sector will depend on companies' ability to strike a balance between innovation, worker protection and customer satisfaction.
Source: *Allianz GenAI Report 2024*. Photo: BoliviaInteligente via Unsplash
This post was translated from the original French.