Chapter 7:
Addressing a Major AI Challenge: Determining Your Level of Investment
While companies within all industries must grapple with how much they plan to use artificial intelligence in their operations, the property insurance industry must be especially deliberative.
There must always be a balance between human operation and AI. After all, artificial intelligence is not meant to replace humans across the property insurance ecosphere.
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 getting data scientists and information technology (IT) leaders involved. There is no “one size fits all” approach to AI, and 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,
“One common key to success is maintaining a clear connection between AI efforts and the core business strategy,”
and data scientists and other IT leaders must be on board from the beginning to “help senior executives determine which use cases offer the strongest opportunities for AI to help fulfill and expand the company mission.”[19]
Before organizations either rule AI or start looking at different AI options, they must determine how large an impact Artificial Intelligence will have on their day-to-day operations, and exactly how it will impact certain functions.
The overarching question to answer is:
“To what degree should our company integrate AI into its workflows and business processes?”
This is a question that requires careful consideration. After all, different functions may benefit from AI capabilities more than others, and some specific processes may allow for AI technologies when some others cannot.
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 of 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 Chapters 10 and 11, a lower-level investment in AI would involve implementing tools that do not directly impact customers. For example, systems with lower degrees of AI are technologies with functionalities limited to automating, streamlining, and optimizing workflows where no decision-making process needs to take place.
Meanwhile, higher-level investment in AI involves technology that plays a more active role in decision-making, thus 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.