4 October 2023 Insurance

‘It’s time to look at generative AI with a balanced perspective’

“Generative AI (genAI) is still a ‘work in progress’ for insurance, but it has a lot of potential. ChatGPT has challenged the known boundaries, and we need to look beyond that now to everything else that’s available for use.”

This was the view of Sandeep Haridas (pictured), EVP, business head, North America at IntellectAI.

His comments came as he spoke at the Intelligent Insurer Commercial Lines Innovation Europe 2023 conference in London in a keynote address titled ‘The rise of genAI in underwriting: vital tools and considerations for underwriters’.

He said there are a huge number of different types of AI and genAI models out there, adding that there are so many that there are some we don’t know much about. But before diving in head first, Haridas advised re/insurers and brokers to first find the use case for genAI in their businesses. Once that is decided, he said, users should then run all the standard tests to prove you cannot solve the issue with existing processes or conventional AI. This is because genAI will be very costly if used inappropriately.

However, he said: “When genAI is applied correctly it can revolutionise underwriting, distribution and claims operations across re/insurance.”

For example, if an excess underwriter needs to understand a complex, proprietary primary policy and its handling of an exposure, such as pollution, genAI can help summarise this exposure’s treatment in the document and ease the underwriter’s burden tremendously.

But he re-emphasised his initial warning that the tech is not fully ready yet, saying: “At the moment, genAI can sometimes hallucinate, and it can be biased and can try to ‘please its customers’ because it might not say, ‘I don’t know’, when it truly doesn’t know the answer. As an underwriter I find that very disturbing.”

In spite of these issues, he said genAI shows great potential and it is worth investing in this space. The best way forward is to find a partner that can be your guide in this evolving area. He also said that AI will not replace underwriters because insurance is a people business and AI cannot adequately replace people in a business that is based on mutual trust.

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