Insurance industry faces consumer scepticism over AI, survey finds

According to GlobalData’s 2024 Emerging Trends Insurance Consumer Survey, there is a strong belief that artificial intelligence (AI) can reduce queueing times to speak to insurance agents, as cited by 73.8% of consumers. Meanwhile, a slightly lower proportion of consumers believe the use of AI can result in operational efficiencies (71.5%), and that the technology is better at pattern recognition than humans (71.2%).

Beatriz Benito, Lead Insurance Analyst at GlobalData, commented: “Despite the positive perceptions, insurers face challenges in ensuring consumers adopt AI tools. Many consumers find that the technology is not yet sufficiently developed to be adopted at scale, eroding their trust. To overcome these trust issues, insurers must prioritise transparency in AI-driven decisions, particularly among those who perceive bias in the tools, such as providing negative claim outcomes. Some consumers will have data privacy concerns, while others will simply just prefer interacting with a human.”

Despite scepticism surrounding the use of AI tools on a commercial scale, satisfaction levels among the customers using such tools are high. The survey reveals that 74.5% of customers using insurance chatbots were either satisfied or very satisfied by the experience.

Benito continued: “Most certainly, the use of AI will transform the insurance industry in several ways and will also drive operational efficiencies and cost reductions. For instance, the availability of AI tools brings a new paradigm in that assistance or customer support can be provided 24/7, while the automation of claims processing leading to reduced settlement times will naturally be viewed favourably by consumers.”

Meanwhile, the speed and precision of AI in pattern recognition means that risks can be quantified more accurately and policies priced more fairly, while fraud detection can be improved.

Benito concluded: “While all in all, AI has the potential of considerably improving satisfaction rates in insurance, the need for the human touch and empathy in engagements continues to limit its full potential. Better communication surrounding AI’s capabilities and nuances will ultimately lead to improved adoption rates.”

The ITIJ team recently explored how AI can improve the efficiency of travel insurance claims processes, as well as reducing human error and fraud.