Generative AI in insurance: How should we see the AI machine?

Using Generative AI is becoming an increasingly everyday practice. This year, the insurance industry will be hit by a broad wave of Generative AI applications. Swiss Re's Group Digital & Technology Officer, Pravina Ladva, emphasises the importance of recognising intelligent machines as more than just another digital tool.

Despite lingering questions and concerns surrounding Artificial Intelligence (AI), the rapid adoption and integration of Generative AI into our daily lives over the past year has been nothing short of breathtaking. But can we confidently declare that we know how to generate net value from AI for business? Not quite yet. We are only at the dawn of our AI journey.

Nevertheless, one thing is certain: The potential of Generative AI to ignite growth and increase productivity is colossal, particularly for industries like re/insurance that rely heavily on data and analytics in their core processes. Augmenting data with intelligence can amplify decision-making, expedite cumbersome processes, and equip employees with newfound insights and capabilities. While AI is not a magic bullet to solve all problems, it has significant potential to help reduce protection gaps by improving the availability, affordability and accessibility of insurance thanks to increased personalisation and improved cost-efficiency.

The value employees can derive from Generative AI is also contingent on how leaders decide to weave AI into their digitalisation strategy – for example, whether to embrace one of the many commoditised solutions on the market or to craft a bespoke solution. Additional critical factors for successful AI implementation encompass governance, upskilling, incentives, role models, and other cultural considerations. 

At Swiss Re, we believe AI enables re/insurers to become more efficient and offer new solutions. But an entire system based on trustworthy data and knowledge is required for its effective use, including human interaction. The added value of AI, therefore, comes from the smart combination of both AI models and human processes. It's crucial to ensure that the respective AI tasks are clearly defined and that humans always have full control of the decision-making.

As we start using Generative AI to boost our productivity should we view AI machines as just another tool? I think that to fully benefit from AI and reduce potential serious risks, we need to ensure a comprehensive approach to AI that goes beyond immediate solutions.

Unlike the cold steel machines from the industrial revolution, the AI "machine" can take on many faces and reactions and needs a nuanced human attitude. Rather than approaching it with a rigid mindset, effort is required to understand the strengths and weaknesses of machine intelligence and its defined function, and ensure that humans remain in charge of decisions. Even if the output may seem superior to human-created content, we have to remember that algorithms simulate intelligence and mimic human language based on patterns, but do not have judgment.

So how should we look at AI to take the most out of it? As AI becomes increasingly embedded in the workflow (think of Microsoft Copilot) I find it helpful to look at it not just as a tool but as a powerful ally – as entrepreneur, technologist and author Antonio Grasso suggests. "The age of the human isn't replaced by the age of the machine; rather, it is one of human and machine working together in symbiosis", Grasso writes in his book "Toward a Post Digital Society". ¹

While machines are not organisms, the concept of two separate entities mutually benefiting from each other in a symbiosis highlights the idea that we must prepare for a long-term coexistence with fast-learning intelligent machines. Honestly, keeping up with the ever-evolving AI machines seems like a lot of work. However, if they enable us to close the insurance protection gap and make the world more resilient, then the effort is undoubtedly worth it. 

¹ Grasso, Antonio, "Toward a Post Digital Society", Italy 2023. (page 122) Swiss Re and Antonio Grasso have a partnership for thought leadership contents.