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Jun 2024

Insurance is not ready for AI

Source: Middle East Insurance Review | Mar 2024

The first main session of GAIF 34 addressed one of the big issues head on: How is the sector leveraging AI to disrupt and reshape the Arab insurance landscape?
By Paul McNamara
Hitesh KotakMunich Re CEO India, Middle East and Africa Hitesh Kotak kicked off a lively session by giving an overview of AI deployment in insurance – and focused closely on AI supporting growth and providing a competitive edge to insurers.
Mr Kotak was quite candid about the purpose of leveraging AI in insurance which is “to provide better customer service.”
He went on to make the point that the adoption of analytical date is still emerging – and said that P&C insurers still do not assess themselves as analytics-driven organisations.
The whole truth
More poignantly still, he said that “the employment of AI in insurance is still very limited – not because the technology isn’t ready, but because we are not ready”.
Mr Kotak rounded out his presentation by looking at some use cases in life, health and non-life – which he identified as an opportunity to unlock commercial opportunities through data and technology.
Lars GehrmannInsurTech and AI
QIC Group chief digital officer Lars Gehrmann then gave a structured overview of InsurTech innovation trends in which he pointed to generative AI as a “hyped theme with a real business impact on insurance”.
Generative AI, he said, is following the innovation S-curve – and predicted that there would be more hype which would be followed by a downturn. But he issued a stark warning to (re)insurers: “If you don’t test AI – don’t work on AI – you will lose out.”
He gave a brief series of forecasts which looked at generative AI infrastructure, foundation models, human-machine interactions and finished with a look at generative AI applications.
This latter group included: Copilots driving massive white-collar productivity gains, AI vs AI – where generative AI fuels a new wave of attack and defence and included a prediction that ‘generative AI takes over journalism’.
Useful in every application
For the insurance sector, he was quite clear that generative AI could be used along the entire value chain – and suggested that it would be important to find some ‘quick wins’ to show both the C-suite and investors what might be possible.
Fady YounesCisco Systems cybersecurity senior director, EMEA Fady Younes switched focus from the preceding presentations and looked at cyber security and cyber threats – in which he made it clear that the focus should be on frustrating attackers and not users – and the opportunity this might present to insurers.
He made some interesting points about why cyber liability insurance matters and gave data on the rise of demand for cyber liability insurance cover, the number of cyber attacks on small businesses, the increase in claims reported by cyber insurance brokers and the percentage of small businesses that had been victims of a data breach that had to shutter their doors permanently within six months of the attack.
The session ended with a lively debate moderated by Arabia Falcon Insurance company chief executive officer Roland Zaatar that left the audience far better informed about the very real future for AI in insurance – where the real fear is of missing out for those who don’t dip a toe in the water. M 
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