KPMG’s latest research on the insurance industry’s integration of artificial intelligence (AI) reveals a landscape of high expectations and varied adoption across different sectors.
The findings, published in the “Intelligent Insurance” report, indicate that 85% of surveyed insurers anticipate gaining a competitive edge by utilizing AI. However, its implementation differs greatly between life and general insurance companies, according to Frank Pfaffenzeller, Global Head of Insurance at KPMG International.
Pfaffenzeller notes that life insurers are leveraging AI in more comprehensive ways. “Life insurers managing long-term risks rely on biometric, medical, and behavioural data to assess longevity and morbidity,” he explained. “AI is revolutionising their underwriting processes by automating risk segmentation, integrating electronic health records, and utilising predictive analytics to refine policy pricing and assessment.” Life insurers are also integrating wearable data and wellness tracking to personalize policy pricing, rewarding healthy behaviours.
In contrast, general insurers predominantly use AI for back-office tasks, particularly managing the high volume of claims processing. This difference reflects the distinct needs and risk profiles of each insurance segment.
Despite the optimism surrounding AI’s potential, a significant portion of respondents expressed reservations regarding its reliability. The report found that 46% of respondents cited concerns about trusting AI within their organizations. However, a quarter of those surveyed do trust the technology, and 57% believe that AI is enhancing the customer experience. Pfaffenzeller also highlighted the role of AI in improving claims automation, by identifying fraud, analyzing death certificates, and streamlining payouts using machine learning.
“Beyond underwriting and claims, AI is transforming longevity modelling and regulatory compliance in life insurance,” Pfaffenzeller stated. “Predictive analytics powered by AI can assess life expectancy, detect disease onset and optimise risk stratification, enabling insurers to refine pricing and payout structures.”
