Artificial intelligences of one sort or another have been quietly increasing their workloads behind the scenes in a variety of industries for years, but 2023 will likely go down in history as the year that AI finally made the jump from a cutting edge technology to a revolutionary one.
While there still seems to be a long way to go before a generalized artificial intelligence that’s capable of seamlessly mirroring human functionality is developed, AI with more specialized uses coupled with processing powers/speeds far beyond human capabilities have already hit the market and are in the process of restructuring operations at companies all over the world.
The insurance brokerage business is no exception, of course, with AI well-positioned to reshape the industry through the automation of many time-consuming tasks, for one, with significant improvements in efficiency already being reaped by the companies that have been early adopters in the AI space.
While much of concern around AI often involves lost jobs and the devaluation of human labor, which are certainly valid fears and can potentially pose significant risks to current business, social, and governmental frameworks (if those systems do not evolve alongside the development of AI in a complementary way), there are of course advantages to be gained for the workers who utilize these emerging technologies beyond the benefits to company bottom lines. For example, insurance brokers who have incorporated AI into their data entry and processing routines have been able to spend more time focusing on establishing and improving relationships with clients.
When considering AI and its potential impacts on the workplace, it’s also important to recognize what AI can not do well, which includes strategic thinking and negotiation skills -especially the kinds based on years of real world experience - and the ability to establish relationships that are based on trust and mutual benefit.
What AI does do well is provide insurance brokers with data-analysis-based insights, roadmaps for streamlined workflows, and automation for the most mundane necessities of the job, giving brokers more time to do the things that they do best and the things that make them successful in their roles.
Some specific ways that insurance brokers have been putting artificial intelligence to work to the benefit of their business are via improved customer service platforms and through increased risk management proficiency, which can both lead to a significant competitive advantage, especially over less technologically-forward competitors.
In terms of customer service, one of the chief advantages AI is able to provide insurance brokerage offices is the ability to respond faster and more accurately than ever before, which leads to increased customer satisfaction, retention rates, and organic business development. Even more, AI has the power to analyze customer patterns, interactions, and behavior to help brokers know what is most important to them and to better identify customer preferences and needs.
On the risk management front, data analysis again gives AI a significant edge when it comes to better assessing and responding to risks. Through processing huge amounts of information and incorporating that data into risk modeling, AI is able to work in a predictive capacity, helping brokers and their clients to identify and minimize threats before they materialize in many cases, including enhanced fraud detection.
Despite the clear advantages that AI can provide insurance brokerage businesses, there are still a substantial number of insurance brokers that aren’t currently utilizing this technology on the job. That said, the number of insurance brokers taking advantage of the opportunities AI provides has grown rapidly in just the last few years, with more than 50% of brokerages expanding plans to use AI over the course of the past few years.
According to a recent survey from PriceWaterhouseCoopers, 86% of respondents consider AI to be ‘mainstream’ technology at this point, which is great in terms of customer comfort and familiarity interacting with this kind of technology especially for customer service support, but it also means the window to obtain a competitive advantage through general AI is shrinking, so there’s no better time than now to start implementing AI into your business processes if you want to gain an edge. Waiting until later just means you'll likely be behind and trying to catch up at that point.
You can read more about AI in the insurance brokerage space here.
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