More insurance firms investing in AI – but many lack plans to upskill workforce

The majority of bosses across the European insurance sector believe that generative artificial intelligence (GenAI) will have a significant impact on their workforce and operations.

That was according to law firm Ernst and Young (EY), which found that 83% of leaders expect GenAi to affect productivity, while 58% anticipate that up to a quarter of all roles will require AI training or upskilling over the next six to 12 months.

As a result, some 67% said their firms had actively invested in the technology, with 76% were planning on increasing spending over the next year.

However, nearly half of the respondents (42%) said they currently had no plans in place to train their workforce in new technologies, while a further 38% described plans as being “in their infancy”.

“Insurance leaders across Europe are continuing to invest in AI, as they seek to improve operational efficiency, increase productivity and enhance customer experiences through tech,” Phil Vermeulen, EY EMEIA financial services insurance leader, said in a statement today (25 October 2023).

“To realise the full potential of AI, insurance firms must continue to train and upskill their workforce across all levels.”

Concerns

EY obtained the figures after surveying executives from 24 European insurance firms, including listed firms representing an aggregate market cap of £239.3bn.

It also found that nearly half of leaders (42%) cited limited understanding and experience of GenAI applications as a top concern around integration, while some 33% said they were uncertain about existing and pending potential regulatory impacts.

And concerns around the ethics of GenAI were centred on both privacy – cited by 32% of all respondents – as well as transparency and explainability (32%).

To manage potential ethical implications arising from GenAI integration, some 29% of respondents claimed they had already put an AI ethics framework in place.

However, 38% of respondents stated their firm was yet to develop an AI ethics framework.

”GenAI technologies are changing operations, processes and customer experiences across the insurance sector, yet concerns around understanding, skills gaps, regulatory impacts and ethics remain prominent,” Vermeulen said.

“Firms operating across multiple jurisdictions may also be considering the commercial and operational impacts of divergent regulatory regimes.

”Defining how organisations are going to approach, develop and integrate new capabilities across operations is a critical first step to ensuring that firms are well positioned to mitigate risks, while effectively harnessing the benefits afforded by GenAI.”