Insurance executives are concerned failing to scale AI will push them out of business
Published: December 3, 2019
Updated: December 4, 2019
Author: Luke Jones
CATEGORY: Industry News
Canada’s insurance industry faces plenty of challenges in the coming years. Pooling the best talent, managing regulations, and tackling disruptors are all things companies must come to terms with. However, more insurance executives are concerned about artificial intelligence (AI) and believe it could put them out of business.
A recent report from Accenture highlights the result of a global survey with 1,500 C-level executives across 16 industries. 113 of the executives were in Canada.
Looking specifically at the insurance industry, 81% of executives think artificial intelligence poses a threat to their business. Indeed, they think if they don’t scale AI adoption they could be out of business within five years.
Just about all (94%) of the insurance execs say they have the knowledge to pilot AI technology, but don’t know how to properly scale it for business.
Titled AI: Built to Scale, the report points to three categories of company in terms of scaling AI:
- Proof of concept factory: 80% to 85% of companies are in this category. Typically, they are:
- IT-led, with a siloed operating model
- Unable to extract value from data
- Yielding low returns due to significant under investment
- Burying analytics deep and AI is not a CEO-focus
- Struggling to scale as unrealistic expectations on time is required
- Strategically scaling: An estimated 15-20% of companies are at this stage. Capabilities include:
- Intelligent automation and predictive reporting
- Experimental mindset, achieving scale and returns
- CEO-focus with advanced analytics and data team solving “big rock problems”
- Ability to tune out data noise and focus on essentials
- Industrialized for growth: Less than 5% of companies have evolved to this point. These companies offer:
- Clear enterprise vision, accountability, metrics and governance to break down silos
- A digital platform mindset; also, an enterprise culture of AI democratizing real-time insights to drive business decisions
Competitive differentiation that drives higher price-to-earnings multiples.