Eight out of ten insurance companies are already working with Artificial Intelligence

1. AI law and its impact on the sector
2. The customer at the heart of Artificial Intelligence

The impact of Artificial Intelligence is increasing year after year in the Spanish insurance sector.

Most organizations are currently working on AI-related projects, and two-thirds have already been implemented. The most advanced ones focus on things related to the customer, with the aim of getting to know them better and trying to improve loyalty to the brand, as well as reducing the risk of defection​​​​​​​​ fraud

This is shown in the report ‘IX Thermometer of Artificial Intelligence and Data in the Spanish insurance sector’ presented by Minsait (Indra Group) in collaboration with ICEA this week, where 57 entities have participated, a market share of 70.7% of premium volume in the insurance sector that came, in 2023, to 76,364 million euros, according to ICEA estimates.

The study aims to analyze in depth the level of implementation of AI in the Spanish insurance sector through a questionnaire divided into five blocks: situation, human resources, technology, use and resource and models. In 2024, ‘eight out of ten insurers in the country are working on Artificial Intelligence projects, and two thirds of these have implemented projects of this type in their business or daily operations, and budgets are Many of them have recycling in mind. meet this need, which is considered strategic by most of them’, pressure Andrés Duque, head of AI for the financial and insurance market at Minsait.

Currently, according to the report, 68% of the organizations developing Artificial Intelligence projects have a special department dedicated to this digitization. The survey also highlights, again this year, the difficulties insurers face in attracting talent specialized in AI and data. Among the most difficult profiles to find are infrastructure architects, AI legal experts (AI lawyers), MLOPS professionals and machine learning engineering experts (Machine Learning Engineers).

The report, says Andrés Duque, notes that the insurance sector is a business that manages and requires a lot of data and information. As a result, it has great potential to improve efficiency and product customization thanks to the implementation of Artificial Intelligence.

Adopting it, according to the study, will increase the competitiveness of insurers, allowing them to reduce costs, reduce fraud and improve processes in terms of time and customer experience and in operations such as pricing, underwriting and management applications in any branch. Among the most relevant challenges identified by the companies involved is the need for a closer alignment between business and technology in this area, and the need for extensive training in all profiles in it the insurers, as well as access to special profiles’.

AI law and its impact on the sector

In terms of management, although it is an inherent part of the insurance sector itself, it is not seen by the companies consulted as the most appropriate challenge to overcome.

Eight out of ten organizations involved in projects that include this technology are already implementing several measures or managing specific plans to comply with the new regulatory requirements. These initiatives range from reviewing their development processes to updating internal data management policies to match the security, transparency and ethical standards of the new requirements.

according to Leticia Gómez, head of AI strategy and Management at Minsait, With the introduction of the AI ​​Act regulations last August, insurers are faced with the challenge of translating the regulations into practice. To this end, good practices to highlight are the inspection of AI systems, an inventory that complies with statutory requirements and the establishment of travel registers in accordance with the requirements of the AI ​​Act, always taking into account conventions -speech each use case to dose efforts. This affects many internal stakeholders within insurers, as well as their processes: this is why it is so important to divide responsibilities intelligently and translating best practices into everyday tools’.

The survey reveals that the Big Data Framework platforms (systems for handling large amounts of data) that are most widely used by the sector are still, in order of preference, Spark, Apache Kafka and Hadoop.

Likewise, Business Intelligence visualization applications, which extract value from data, are being widely adopted in companies, with Power BI once again the tool of choice.

In terms of Artificial Intelligence, eight out of ten organizations that have already implemented AI are using Data Science platforms to analyze these levels of information, while the use of platforms Deep Learning (which promotes automatic learning on systems) down to 68.1 %. On the other hand, cloud services maintain a strong presence in the insurance sector, with nine out of ten making use of them, with Microsoft Azure and AWS being the most popular options.

The customer at the heart of Artificial Intelligence

Artificial Intelligence projects are increasingly focused on customer-related areas, with the aim of better understanding customer needs and improving brand loyalty, as well as reducing risks such as customer churn and fraud.

In the case of car insurance, the use of AI-based video knowledge continues to grow year after year, establishing itself as an essential tool for companies implementing this technology. Although Marketing, Operations and Actuarial are the departments showing the most interest in AI, they are not driving these projects, highlighting the importance of AI in other strategic areas such as loyalty , operational efficiency and customer retention.

The average number of AI models implemented continues to increase year after year, reaching an average of 17 per entity. AI algorithms continue to be fed primarily structured data, although a growing percentage of organizations are incorporating semi-structured and unstructured data into their models they have In addition, automated model checking is becoming increasingly important, with 87% of organizations implementing it in at least one of their processes.

The data submitted by Minsait and ICEA regarding insurance companies coincides with the level of construction shown by this sector in the Ascendant Report, which Minsait presented a few months ago and where the digital company, under the title ‘AI: radiography of a revolution in progress’, analyzed the level of adoption of AI in more than 900 organizations in Spain and other countries others from 15 categories of activity.

In it, the insurance industry was positioned as one of the pioneers in introducing AI, well ahead of other areas such as business or public administrations, due to its inherent integration and data-intensive capabilities. to the industry (actuarial risk calculation, predictive analysis). , investment, among others). The Ascendant report noted that today, AI is already being applied throughout the insurance value chain, which is now being highlighted again.