Evolution of Underwriting Using Generative AI

Multiple industry headwinds and unconventional competitors have compelled traditional insurers to enhance their products, processes, and customer experiences. To drive recovery and ensure future growth, insurers are modernizing their IT infrastructures and prioritizing operational efficiencies and data-driven decision-making. However, increased market risks, rising claim costs, disrupted supply chains, and outdated processes are pressuring profit margins, necessitating a shift from insuring loss to ensuring protection.

Generative AI can be valuable for insurers to enhance their RoI from modernization efforts and accelerate business value realization. Underwriting, in particular, presents significant long-term value-creation potential. However, while generative AI can transform several core insurance functions, firms must start with small, incremental steps to demonstrate business value before scaling up. Implementing generative AI with staggered investments can yield near-term efficiency gains, improve underwriting accuracy in the medium term, and transform the underwriting function in the long term.