The future of AI in the insurance industry

Overview

AI is revolutionizing the insurance industry, offering transformative potential across sales, underwriting, claims, and customer service. Insurers that embrace AI comprehensively are seeing substantial competitive advantages.

Key Insights

• AI Leaders vs. Laggards: Insurers leading in AI have achieved 6.1 times the total shareholder return (TSR) compared to laggards. This demonstrates the significant financial impact of AI integration. (Source: McKinsey report)
• Operational Improvements: AI has led to a 10-20% improvement in new-agent success rates, a 10-15% increase in premium growth, and a 20-40% reduction in customer onboarding costs. (Source: McKinsey report)
• AI in Core Functions: AI is used in sales productivity, underwriting accuracy, claims management, and customer service, enhancing efficiency and personalization. (Source: McKinsey report)

BFSI Relevance

• Why Relevant: AI's ability to enhance efficiency and personalization is crucial for insurers to meet evolving customer expectations and remain competitive.
• Primary Sector: Insurance
• Subsectors: Life Insurance, General Insurance, Claims Processing
• Actionable Implications:
  • Develop a comprehensive AI strategy and integrate it across all business functions.
  • Invest in talent and change management to overcome barriers to AI adoption.
  • Focus on building a flexible AI tech stack and enhancing data capabilities.

Entities

• Organizations:
  • McKinsey: Provides AI consulting and has worked with over 200 insurers globally.
• Vendors:
  • QuantumBlack: McKinsey's AI consulting arm, offering reusable AI components for insurers.

Author Authority

The report is authored by experts from McKinsey's Financial Services Practice, providing credible insights based on extensive industry experience and research.