Large language models, voice cloning and digital avatars. These are just a few examples of the many AI applications available. "Now it's time for vision and control. Companies therefore have to go back to the drawing board," is the message of Bart Veenman, senior manager AI at KPMG, during the Association's Damage Afternoon 2024.
Artificial intelligence (AI) is the umbrella term for the many AI applications that companies are using in more and more business processes. "This is just the beginning of a long journey. Awesome applications such as voice cloning and SORA create a whole new reality, but the question is: how do you create value as an organisation? When it comes to quality, today's tools are not all equally good at completely transforming organisations. But development is moving fast and if organisations don't get their foundations, especially in the field of data, in order, they will eventually be too late," Veenman kicks off. In his work, he helps companies with vision, strategy and implementation to create real value with AI.
Forms of artificial intelligence and application:
- Descriptive AI for e.g. analyses on complex documents
- Predictive AI for making predictions with external factors/data, among other things
- Prescriptive AI for business operations and maintenance, among other things
- Generative AI for customer service, among other things
Move past the hype
According to Veenman, KPMG's research into the state of AI in the financial sector shows that companies often get stuck in the experimental phase. Or as he calls it; the proof of concept phase. "At that stage, AI is not scalable. In addition, it is still too often seen as something from tech/IT instead of from the business as a whole. So look for the bottleneck to get to the next phase, from development to scalability, production and adoption. This way, you can go beyond the AI hype and really make it your own. This starts with a future-oriented vision of AI, which is then translated into a concrete strategic approach that is elaborated into an operating model, the 'how'. And that means that all organisations have to go back to the drawing board. Also insurers and their chain partners."
Intelligence Workers
A vision and strategy will also lead to a culture change. "Today, most employees in the insurance industry are 'information processors,'" he says. "But through the application of AI in business processes, they are becoming 'intelligence workers'. They are the ones who will make more strategic choices with the help of AI. Think of it, for example, as the transition from editor to editor-in-chief. And how much do you need for that in the future?" Veenman gives the people in the room food for thought.
Distinctiveness
According to him, one thing is certain. The application of AI is driving organisational change that has an impact on all business processes, from sales, risk management, customer service, compliance to underwriting. And to all employees, from junior to senior. Which steps you will take as a company in the coming years depends on the vision and the quality of the data foundation on which you can continue to build.
Finally, Veenman predicts that insurers will become more and more alike at their core due to the use of AI. How are you going to differentiate yourself and how do you guarantee the license to operate? "AI makes your company's IQ (intelligence) scalable. The EQ (empathy), the CQ (creativity) and optimal cooperation within the entire insurance ecosystem will determine the distinctiveness. That's why now is the time to take control, because the organisations that make the best use of AI to empower people and processes will win the race."
Use case Tryg: Extraordinarily powerful
Lars Julin, CEO of Peopleway, shows how AI can empower employees and make processes even better with a use case from Scandinavian insurer Tryg. Based on his knowledge of psychology, he integrates AI with behavioural science to increase human potential within companies. Peopleway does this with an AI-augmented model.
Julin: "AI is not new in the insurance sector. It has been used in the form of automation since the late 1980s. What is new, however, is the rapid development that goes beyond traditional automation. The trick now is to embrace new technology. Take, for example, augmented intelligence, the combination of AI and human interaction. We divide that into two subdomains. Reactive augmented intelligence is already being used by insurers. Think of the chatbots and the processing of claims. In addition, there is proactive augmented intelligence that adapts to our interactions and supports and strengthens us. A clear example is the sports watch. Based on our data and AI, such a watch provides us with personalised training programs and provides real-time feedback and advice without us asking for it."
Peopleway's AI-augmented model is capable of helping insurers optimise business outcomes even further. What does Julin think is the magic? "The application of proactive augmented intelligence changes and reinforces the behaviour of employees. He explains this on the basis of the Tryg use case on saving on fraud in household claims. Since implementing the Peopleway model in the fall of 2022, claims handlers have more than doubled fraud lead detection by the end of 2023. Tryg increased the number of fraud leads by 123%. At the same time, they maintained a consistent 51% hit rate. And at the end of 2023, the insurer achieved a fraud savings rate of 7.1%."
So, according to Julin, it is extremely powerful to use AI to accelerate and amplify human behaviour. "Sometimes this tool is about remembering, instructing and learning. But surprisingly powerful is the reinforcement of employees' intuition, curiosity and reasoning."
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