Briefing: How AI can humanise insurance

“It’s hard to open an insurance publication today without stumbling across another article about artificial intelligence (AI). Some hail it as a silver bullet; others see it as a Pandora’s box. The truth, as ever, is more nuanced — but one thing is certain: AI is no longer just a buzzword. It’s a boardroom imperative that’s reshaping how we think about risk, resilience and the very nature of our industry.”

I have a confession to make.

The opening paragraph of this column was not written by me at all but by artificial intelligence (AI). But, as it happens, AI Kelly is right. AI is right here, right now and reshaping our industry at pace.

Those among us fearing an impending Terminator style apocalypse – that’s a 1980s movie reference for the millennials among us – should not panic. AI is not a takeover – it is a tool. And the irony is, if we use it correctly, it has the potential to make our industry more human, not less.

Simply put, AI’s capacity to process vast amounts of data in real-time is revolutionising underwriting and risk assessment. Algorithms can now analyse behavioural data, social media activity and even satellite imagery to provide more accurate pricing and personalised policies.

In claims, AI driven automation is reducing processing times from weeks to minutes, improving customer satisfaction and cutting operational costs.

Yet the use of AI in insurance is about much more than improving efficiencies. It is about using predictive logic to anticipate customer demands, helping ensure cover limits are sufficient and that risk mitigation strategies are proactive, not reactive.

All of which is why my company Howden is a great champion of AI – with a couple of caveats.

Enabling results

Firstly, as Spiderman’s Uncle Ben famously said: “With great power comes great responsibility”.

AI systems are only as good as the data they are trained on. If that data is biased, the outcomes will be too. We must ensure transparency in how AI decisions are made and be vigilant about ethical implications.

Regulation is catching up, but slowly. The UK’s AI regulation strategy is still evolving. So, insurers must stay ahead of the curve and be constantly on the ball to ensure compliance and maintain public trust.

Secondly, we have to be very clear – AI does not replace empathy, intuition, or trust. These are the cornerstones of our industry. When someone makes a claim, they are often going through a difficult time. No algorithm can replicate the reassurance of a human voice or the nuanced understanding of a seasoned broker.

In other words, AI should be an enabler. It frees up people to focus on what they do best – building relationships, offering tailored advice and being there when clients need us most.

AI and human harmony

The future of insurance is not AI or people – it’s AI and people.

There are some things you can’t do online and when you are working in the community, like in a branch network, you understand what your clients need far better than if you are interacting with them remotely.

Ultimately, the winners in this brave new world will be those that blend cutting edge technology with human expertise.

We must invest in both. In AI tools that enhance decision-making and in training our people to work alongside them.

AI will make us better – faster, fairer and more personalised. But it will never be a substitute for face-to-face contact that only human beings can provide. We are the spirits in the machine.

After all, when the chips are down, our clients will always seek support from a real human – not their AI alter egos.