The insurance industry is a complicated place. High volumes of data, complex processes and time pressures create an environment which relies on skilled employees and highly-manual workflows. There’s one innovation that’s changing that; AI. It’s rewriting the working world, and that includes the insurance sector.

With so much conflicting information out there about this brave new AI-world, it’s difficult to know what to believe. That’s why it’s time to bust some myths around AI and the insurance industry.

The rise of AI in insurance

With AI already being deployed in both business and personal contexts, organisations are having to adapt and find ways to implement this new technology before they’re left behind by their competitors.

As with all technologies, there’s an element of scepticism and distrust. The possibilities of AI are so far reaching yet the technology is seemingly in its infancy which makes it hard for many to put their trust, and their businesses, into this new way of working.

AI can feel confusing and overwhelming, it’s a huge technological development and one that’s making advancements every day. That’s why it’s key to find the right information to help support you to make the best decisions for your team and your business.

Myth 1: AI replaces jobs

The constant stream of headlines focused on AI replacing humans is worrying. It is undeniable that AI is already changing many people’s roles in some way, but the reality is that it’s a long way off replacing the vast majority of roles in their entirety.

Chief Scientist at Meta, Yann LeCun regularly cites this viewpoint, stating “AI won’t take your job. But it will transform it and create new ones.”

AI is a tool. Our generation of workers have a new, incredibly intelligent tool at our fingertips which we should embrace where appropriate, in order to empower employees and streamline workflows, and which will at the end of the day also make many people’s roles more enjoyable.

Myth 2: AI might not be secure

One of the biggest barriers to AI adoption is trust, and it’s not unfounded. Without truly understanding the hosting infrastructure and how the back-end interfaces with your systems, it can feel like a security risk. It’s natural to be a bit suspicious. But as with any technology, there are security risks which can be mitigated by implementing AI responsibly.

We need to be mindful about what AI tools we choose to use. AI is popping up everywhere, from your email to your social media profiles, and you can end up opting into services you don’t need. Research has found that 43% of professionals use ChatGPT at work, yet 70% of them haven’t informed their manager. If a business doesn’t know what AI is being used, how it’s being used, and where, then it increases their security risk

Assessing AI tools and their security credentials before you begin to use them will help keep your data secure. That includes looking at where the AI you’re using is hosted and what the retention and data training policies are. These are key considerations as they have a dramatic impact on your security and data protection.

Proactively training your employees in how to use AI and how to recognise associated risks such as data leaks is critical. 82% of security breaches involve human error, deception or misuse of technology. Mandatory training can reduce that number and ensure AI is a benefit to your business, not a security risk.

The better people understand AI, the safer it is for everyone.

Myth 3: AI is expensive

If you want a bespoke, complex AI solution that’s going to work for your business then it can come with a hefty price tag, but that doesn’t mean AI is out of reach. Many AI solutions are scalable, accessible and can be adopted incrementally, spreading the financial burden.

It’s important to look beyond the initial cost. Cloud-based AI tools can reduce ongoing costs which can be offset against the initial investment.

What’s often overlooked is that the biggest cost in many insurance operations isn’t technology, it’s time. Take data analysis and cleaning. It remains a heavily manual process across the industry, with 76% of analysts still relying on spreadsheets. That not only slows things down, it increases the risk of human error and inconsistency.

McKinsey found that AI can automate up to 60-70% of this type of work. On average, analysts spend 20.8 hours a week just collecting and preparing data. Those using AI are saving 8.6 hours of that time, effectively getting back an entire working day.

Understanding how to integrate AI into your business in a secure, cost-effective way is essential for remaining competitive in today’s rapidly changing technological landscape. It can be a highly effective tool and now is the time to embrace the opportunities it brings.