Insureds with AI experience more likely to embrace it, report says
Insurity released the results of its 2024 AI in Insurance Report, revealing 63% of respondents had a positive AI experience with their insurer.
An AI in Insurance Report published by Insurity reveals how insureds feel about P&C carriers using the technology, with some saying it’s a deterrent and others sharing they would recommend an AI-integrated insurer to friends and family.
P&C insurers have embraced AI, incorporating the system into claims processing, fraud detection, personalized risk assessment and AI chatbots to answer common questions. Insurity’s report found that respondents with experience using AI were more likely to view it in a favorable light.
More than 1,000 respondents answered the eight-question survey, released in January 2024, to evaluate the attitudes of today’s insureds about the use of AI in P&C insurance. Overall, consumer opinions took a positive turn if they had direct exposure to services enabled with AI.
First-hand AI experience
Insurity’s report discovered consumers were less skeptical and more trusting of AI if they had first-hand experience using the technology through their P&C carrier, with 63% giving positive feedback after interacting with the AI system.
While 42% of respondents said they were less likely to purchase an insurance policy from an insurer that admitted to using AI publicly, these consumers largely had minimal interaction with AI. These findings suggest the negative connotations associated with using AI in insurance come from a lack of understanding and inexperience.
“This report underscores the critical importance of not only investing in AI technology but also in the education and communication resources necessary to earn policyholder buy-in,” said Chris Lafond, chief executive officer at Insurity.
Gen Z and baby boomers less trusting of AI
Breaking down survey responses by generation revealed that some demographics are more skeptical of AI than others: 33% of millennials (born 1980-1994) reported they would recommend their insurance carrier start using AI, compared to 18% of Gen Z respondents (born 1995-2006) and 16% of baby boomers (born 1946-1964).
Millennials appreciate the transformative benefits of AI, recognizing how it streamlines the claims process and provides instant support, according to Insurity. Gen Z understands AI technology but worries about transparency, privacy and its impact on the job market, and baby boomers’ distrust may stem from a lack of familiarity. Insurers can reassure these age groups by investing in educating insureds in AI.
“Present it [AI] as a helpful tool, like, hey, you don’t want to have a loss; we don’t want to pay a claim,” said David Tobias, general manager of insurance at Nearmap. Tobias believes AI is crucial for insurers to partner with insureds in risk management, but it comes down to transparency and making sure AI models are “glass boxes,” not “black boxes,” that can show insureds why and how the technology came to its decision on their coverage, claim or inquiry. He adds that AI and other insurance technologies could unlock new coverage options because the models can better identify and mitigate risks.
Insurers diving in with AI
Another survey conducted by Conning Insurance Research on the integration of AI within the insurance sector revealed that 77% of respondents had adopted AI into their business operations, up from 61% in 2023. The findings emphasize the vast opportunities for generative AI and advanced technologies to dive deeper into customers’ needs and identify ways insurers can increase profitability. However, implementing these changes requires investing in time and resources.
As AI models expand across the industry, Conning expects to see a continued tick upward, with generative AI being an integral part of modern insurance companies. Insurity’s report shows insurer attitudes toward AI are trending up too.
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