Chapter 7:
Addressing a Major AI Challenge: Determining Your Level of Investment
While companies across all industries must grapple with how much they plan to use artificial intelligence, the property insurance industry must be especially deliberative.
Insurance organizations must always have a well-established balance between human insight and AI tools. After all, artificial intelligence is not meant to replace humans across the property insurance ecosphere, but rather to augment them.
There is also a broad spectrum of AI software platforms and applications. Depending on specific business and customer needs—and the relevant state regulations—there are different levels to which a company can implement AI.
The first step in making this determination is gathering data scientists and information technology (IT) leaders. Without a “one size fits all” approach to AI, there is a lot to consider when determining the optimal amount or types of AI technologies to integrate into the digital ecosystem of a property insurance company or a restoration contractor.
According to a 2022 Deloitte report,
Success with AI hinges on a business maintaining "a clear connection between AI efforts and the core business strategy.”
End-to-end collaboration between decision-makers and AI experts is critical. Data scientists and other IT leaders must be on board with AI decision-making from the beginning to lend necessary expertise to the senior executives who determine the primary use cases that will best drive the company mission.
Before proceeding with AI, or ruling out its use, organizations must fully assess its impact on every function. Different teams may benefit from AI capabilities more than others, and some specific processes may allow for AI technologies when some others cannot.
Ultimately, the question to answer is:
“To what degree should our company integrate AI into its workflows and business processes?”
Overcoming the complexities of AI implementation begins with breaking down how deeply a company can and wants to invest in this technology. Then, businesses must determine which forms AI will take.
The Risk/Benefit Analysis
When conducting a risk/benefit analysis surrounding AI adoption, it’s important to identify all areas where your business might be vulnerable. Consider the following questions:
- How will AI impact our customers?
- Does the quality of our data merit the adoption of an AI application? And what is our willingness and ability to invest in data oversight?
- Does the AI application fit into our compliance/regulatory framework?
- Based on how much we plan on scaling our business, can we afford NOT to invest in AI?
With accurate and informed answers to these questions, it will become much easier to determine how to incorporate AI into your workflows. And when you know where AI fits into your business model, you can also identify the level of investment you want to make.
Lower-Level Versus Higher-Level AI Integration
As discussed in more detail in forthcoming chapters, a lower-level investment in AI would involve implementing tools that do not directly impact customers. For example, lower degrees of AI typically involve technologies focused on automating, streamlining, and optimizing workflows where human decision-making is not required.
Meanwhile, higher-level investment in AI involves technology that plays a more active role in decision-making, thus more directly impacting policyholders.
Once a company determines its ideal AI investment level, it can move forward confidently and make a specific game plan for implementation and change management.