ATLANTA, Dec. 3, 2019 /PRNewswire/ -- A new study
released today by LexisNexis® Risk Solutions found that the
majority of the respondents (62%) work for insurance carriers that
have already adopted artificial intelligence (AI) and machine
learning (ML) initiatives and that an overwhelming majority (75%)
believe AI and ML can provide carriers with a competitive advantage
through better decision-making.
While carriers are generally positive about their use of
Artificial Intelligence and Machine Learning (AI/ML),
implementation does come with its own set of challenges surrounding
staffing, data and compliance, which the study also identified as
the biggest obstacles carriers face in order to take full advantage
of AI /ML. The survey was completed by more than 300 insurance
professionals in data science, analytics, actuarial, technology,
underwriting, product management and claims roles, at the top 100
U.S. insurers across the auto, home, life and commercial
markets.
"Insurers are grappling with unprecedented changes, whether it's
how digital impacts customer expectations, blurring industry lines
that foster co-opetition and new business models, or increasing
regulatory requirements around data privacy and security," said
John Beal, Senior Vice President,
Data Science, LexisNexis Risk Solutions. "A key lesson from the
study is that carriers must invest in capabilities that will help
them thrive in a faster-paced, data-driven market. AI/ML
capabilities can give them the real, measurable lift they need to
get ahead."
To that end, the study found that early Adopters of AI /ML are
already seeing significant benefits such as faster claims
settlement (88%), more targeted cross and upselling (88%), improved
fraud detection (87%), and better risk scoring (85%).
Adoption Patterns
The survey revealed that respondents fell into two distinct
categories related to their AI/ML usage:
- Adopters – the 62% who are working for carriers that are
already applying, piloting or planning AI/ML initiatives
- Non-Adopters – the 38% who are working for carriers that
are not even in the planning stages of developing AI/ML
initiatives.
Among the respondents representing Adopters, most come from
large carriers, comprising 82% of the top 20 U.S. insurers.
However, according to respondents there is also significant AI/ ML
adoption across the remaining top 100 carriers, with 62% adoption
amongst the top 21–50 carriers and 51% adoption amongst the top
50–100 insurance companies.
The Challenges Ahead
While insurance carriers are largely positive about the value of
their AI /ML initiatives, the study identified the challenges that
they will need to overcome:
Staffing Challenges
Staffing pressures concerning
knowledge and talent for AI /ML application is a major concern.
Half of the respondents (49%) said that AI /ML implementation have
already impacted their staffing plans today. Carriers that are
planning to increase staff to address the need for new AI /ML
approaches are trying to fulfill two needs: talent (42%) and data
science capabilities (58%).
"Insurers need people who can understand the inputs and outputs
of the applications, and who can explain them to the business,"
said Beal. "They need knowledge managers who can speak in both
technical and non-technical languages and link the dialogue between
parties."
Data Challenges
Access to high-quality, trustworthy
data is another key concern. The three main issues with data that
survey respondents mentioned include: their ability to manage the
volume and security of the data; linking and normalizing data
across different data sources; and ensuring access to the data.
Adopters clearly see the value of third-party data, as a majority
of the adopters (82%) say their organizations have or will buy
external data for their AI /ML initiatives.
Compliance and Regulatory Challenges
The third set of
hurdles includes compliance and regulatory challenges with
insurers' use of AI /ML. Adopters worry that regulators and legal
bodies may not understand AI /ML applications and thus could
possibly block or limit them. Three-quarters (74%) of adopters also
have concerns about data privacy, security and ownership issues,
anticipating increased regulatory scrutiny as more data sources are
accessed and modeled.
A Way Forward
While AI /ML is already delivering
benefits for insurance carriers, most carriers need to find a
technology partner that can help maximize their AI /ML initiatives
with demonstrated expertise in: building models that leverage
advanced analytics; managing, normalizing and analyzing increasing
volumes of data; and a deep understanding of the insurance
industry, including the regulatory environment.
As insurance carriers prepare for the dawn of a new decade and
AI /ML adoption grows, only those insurers who fully embrace and
implement AI /ML capabilities now will be able to yield that
competitive advantage.
For additional insights and data about AI /Ml and our study,
please visit the State of Artificial Intelligence and Machine
Learning in the Insurance Industry white paper.
About LexisNexis Risk Solutions
LexisNexis Risk
Solutions harnesses the power of data and advanced analytics to
provide insights that help businesses and governmental entities
reduce risk and improve decisions to benefit people around the
globe. We provide data and technology solutions for a wide range of
industries including insurance, financial services, healthcare and
government. Headquartered in metro Atlanta, Georgia, we have offices throughout
the world and are part of RELX (LSE: REL/NYSE: RELX), a global
provider of information and analytics for professional and business
customers across industries. For more information, please
visit www.risk.lexisnexis.com and www.relx.com.
Media Contacts:
Rocio Rivera
LexisNexis Risk Solutions
Phone: +1.678.694.2338
rocio.rivera@lexisnexisrisk.com
Mollie Holman
Brodeur Partners for LexisNexis Risk Solutions
Phone: +1.646.746.5611
mholman@brodeur.com
View original content to download
multimedia:http://www.prnewswire.com/news-releases/new-insurance-research-report-from-lexisnexis-risk-solutions-highlights-the-state-of-artificial-intelligence-and-machine-learning-in-the-insurance-industry-300967697.html
SOURCE LexisNexis Risk Solutions