The insurance industry has been historically slow to adopt new technologies, but the COVID-19 pandemic accelerated the push toward digital transformation. Insurers are now embracing technology solutions to modernize their processes and enhance efficiency. AI and machine learning are at the forefront of this shift.

“Companies need to rip off the band-aid and start building out new tech-enabled processes,” says Martin. “Tweaking old legacy systems is like trying to put a Roku stick into a console TV set.”

From underwriting and claims processing to customer service and fraud detection, AI is being used to automate processes and reduce costs. However, as AI becomes more prevalent, concerns around its impact on jobs and regulatory compliance grow. Nearly 70% of underwriters and actuaries worry about being replaced by AI within the next five years.

“Technology is wonderful, but there’s significant value in understanding why certain processes are in place,” warns Rodebaugh. “If you don’t understand the system, it’s difficult to validate accuracy and ensure compliance.”

To stay ahead, insurers must embrace technology while balancing the risks and ensuring that human oversight remains integral. Partnering with insurtech startups or leveraging AI in a controlled manner will be key strategies for success in 2025.

Key Takeaways:

• Strategic adoption of technology, with human oversight, is essential.
• AI and machine learning are transforming key insurance functions.
• Concerns around job replacement and regulatory compliance are growing.

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