This week’s newsletter has several stories on Artificial Intelligence (AI) and its current and potential use in all lines of insurance. Florida lawmakers meeting in committee this month expressed concern, asking a panel of industry experts how insurance companies use AI and seeking assurances on safeguards against its abuse. A bill has since been filed, similar to one that failed last year, that would require humans – not machines – make the sole decision on any claim adjustment or denial. The topic has certainly caught on with the industry. The International Insurance Society’s (IIS) recent annual global survey found AI had overtaken inflation as the chief economic issue facing insurance companies. Two thirds of the surveyed executives ranked AI at the top of their technology and innovation agendas, which is a 17% jump from the 2021 numbers.
Paul Carroll, the editor-in-chief of Insurance Thought Leadership, wrote a very thoughtful article that talked about the IIS survey and the pace of huge changes in the industry. Most notably, that many people view technological revolutions like AI as “Big Bangs,” but in reality, it often takes decades for all the infrastructure and industry players to adjust and really utilize an invention. Just like James Watt’s steam engine that we learned about in grade school, together with the needed legal innovations and the advent of the factory to really propel us forward, AI too, will need servers, more machine learning, and specialists that can fully realize its potential, especially in digital data spaces like insurance.
Inflation also weighs heavy on the minds of insurance executives in the survey, as 63% ranked it among the top economic issues for the 4th consecutive year. Rounding out the list of top issues is the aging workforce, with each passing wave of retirements causing the concern to spike. In the last year alone, the concern has almost doubled, leaving the insurance industry in need of fresh, new talent. Hopefully technology like AI will help draw savvy new minds to the field who have a knack for transforming business landscapes with the powers of tech.
Minds like Mindy Chen, Mutual of Omaha’s vice president of segment analytics, who reminds of us of the revolutionary applications of AI in a recent two-part conversation with Digital Insurance. Gone are the days of frustrating traditional chatbots, long customer service wait times, and language barriers. In Mindy’s field of streamlining life insurance customer service, she’s found that AI excels at “structured, repetitive, rules-based tasks,” which still leaves space for our agents to negotiate and apply their years of experience. As I’ve said time and time again, technological advances are here to stay − it’s up to us to work with and not against the current.
As you start your week, please note that there is a tropical wave that has developed over the eastern Caribbean Sea that could turn into a tropical depression and possibly more. Please monitor the National Hurricane Center.
LMA Newsletter of 10-20-25
