The Maturity of Generative AI in the Specialty and Reinsurance Markets

July 2, 2024

Today we launch our report entitled The Maturity of Generative AI in the Specialty and Reinsurance Markets. We conducted a study of 22 specialty and reinsurance carriers.

Download the report

Key points from our report:

• Gen AI will be “very transformational” in the long-term (5+ years): 19 out of 22 rated the long-term transformative potential of Gen AI as at least 7 out of 10

• Carriers are not advanced in their AI journey and Gen AI is struggling for attention:
  • All carriers are at the early stages of their AI journey; even the most advanced (3 of those interviewed) are still only building ‘strategic foundations’
  • 80% cite “other strategic objectives” as the biggest barrier to Gen AI adoption
  • Many are taking a deliberate “wait and see” position for now, making some investments in foundational capabilities, but scanning actively to see where others were making progress

• A range of use cases are being explored: There are three types of use cases that span the entire (re)insurance capability model: increasing the efficiency of existing activities, extending or enriching existing activities, or substituting current ways of working
  • 62% of carriers have also gone live with an internal chatbot or have one at a late stage of development
  • Querying large datasets was the most commonly mentioned use case by our participants
  • Incumbent carriers tend to be focused on expense ratio opportunities whilst newer players are more focused on loss ratio opportunities

• Carriers currently feel unprepared to embrace Gen AI across their operating model (average score of 5.2 out of 10):
  • Leadership was the strongest capability highlighted (average of 6.3 out of 10) and as such is rarely seen as a major barrier; most exec teams are excited about Gen AI’s potential but want to see proven benefits before full buy-in
  • The biggest concern is the talent gap (average of 4.4 out of 10), with fears of falling behind without the necessary expertise; to tackle this some use third parties whilst others are adapting recruitment, and almost all are training teams internally
  • Governance is recognised as crucial, with clear executive ownership and senior leadership buy-in, but interviewees understood the risk of it becoming an “inhibitor instead of an enabler”

About the author(s)

Miqdaad Versi leads strategy and operations projects for some of the world’s largest (re)insurers. Graduating with a first class degree in Mathematics from the University of Oxford, Miqdaad has a strong technical skillset, allowing him to dig beneath the surface to uncover the real problems facing the executive teams with whom he is working. He balances strategic and market knowledge with pragmatism to drive towards solutions that deliver for his clients. He is a regular commentator on the topic for industry seminars, podcasts and summits, and often provides comments to the press on topical issues.

The author would like to acknowledge the following for their editorial contributions to this piece: Chris Sandilands, Greg Brown, William Austen & Joanna Smith.