Instead of focusing on what AI can do from a technological perspective, insurers should look at how AI tools can improve the customer and employee experience, executives said during a conference.
The comments came at the technology conference, held at Luxexpo, on 26 June 2024.
“The insurance sector has been accused of being a laggard” in technological transformation, said Matt Moran, leader EMEA insurance deals & value creation, insurance industry advisory and technology alliances at in Luxembourg. However, when it comes to AI, for insurers, “if you don’t adopt, you’ll die in the next five years, in my opinion.”
Die another day?
, CEO at , pointed out that the insurer has been operating for more than 100 years and has often been warned that upstarts would drive it out of business, “but that didn’t happen.” That said, AI “will change all lines of business” in the insurance sector, Lauer said on the “” panel.
First, AI will impact customer experience, said , managing director at . That will mainly come from transformed customer expectations. Second, jobs at insurers “will not disappear”, he said, but transformed to more added-value positions. In turn, it “will be fun for [employees] to work in an insurance company, Elia said. Third, AI will disrupt business models, likely upturning distribution networks.
AI will impact operational efficiencies, primarily because of changes to the employee experience, Elia predicted. He said to get employees on board with changes, managers need to “develop empathy with people [on their staff], the same you develop empathy with customers.”
AI is not the solution to everything
The most important thing for firms is to understand “what is AI and what it is not,” said Lauer. In countless meetings, AI is proposed as the solution to every problem, “which it is not.”
In Lauer’s view, company leaders need to explain to staff “where management thinks they will be in three to five years” and “explain what’s in it for them” in order to bring the team along in the process.
Digital experience
In terms of the technology, Lauer said he’s met with a lot of startups over the past 15 years. Quite often, the presented “solutions to problems that do not exist.”
“How often” when using digital tools “do we get a shitty experience,” for example, when trying to book or buy something, Lauer asked the crowd. “80% of the time, it’s a bad digital journey… how often do you succeed the first time.”
In other words, incumbents and innovators are often inward-focused, but need to create solutions for end-customers and not for themselves.
Despite strict rules of the use of cloud computing, Luxembourg is a technologically more mature market than Belgium and France, said Julien Renkin, CIO at Sopiad. That is due to understanding the need, as a small country, for agility.