Insurance industry is at a technological tipping point

A new whitepaper from Reuters Events, based on Reuters’ recent Future of Insurance Canada 2024 event held in December 2024, says the Canadian industry has been slow to advance in matters of technology, but adds that competition, exacting consumers and escalating risks are propelling the adoption of artificial intelligence (AI), across the board.

They say in 2024 Canada became a riskier place to live, work and insure. The paper, How Canadian Insurers are Advancing in the Era of AI, discusses the summer’s catastrophic weather events, tariffs, the auto theft crisis and says “cybercrime remains a persistent, widespread and disruptive threat to individuals, organizations and all levels of government.”

A perfect storm 

Although carriers have been slow to modernize, they add, “this perfect storm, coupled with eyewatering advances in AI has brought the industry to a technological tipping point. This was evident.”

Advanced AI, they say, is changing the very nature of insurance, facilitating greater automation and real-time data analysis. “The opportunities are immense, but so are the risks,” they write. “The Canadian industry is, therefore, proceeding with cautious optimism and clear recognition of the need for a multi-stakeholder approach to regulation that supports business while protecting society, its governments and citizens.” 

Later in the document, the Insurance Bureau of Canada’s (IBC) vice president of strategy, Liam McGuinty “perhaps best articulates how Canadian carriers see the future unfolding with cautious optimism,” they write. “We can’t and won’t be indifferent to the possibilities of AI in advancing our own competitive cause, but we also need to be aware that AI won’t just be changing our industry, it will be changing the world and our customers,” McGuinty is quoted as saying.

AI use cases mentioned, meanwhile, include simulated scenarios to streamline product development, hyper personalized risk profiles and communications and advanced document management in claims. In discussing their different use cases currently being explored, developed and deployed, the executives gathered at the event were happy to share what each company has been up to in recent months and years.

Everything is on the table 

Manulife, with its “huge” in-house engineering team, with Microsoft’s help, has established 72 AI use cases and is putting 15 into production. “Internally, everything from document management to call centre productivity and industrial relations is on the table. It’s also partnering with China’s Alibaba Cloud to explore ways to bring GenAI products to the market and the public.” 

At Sun Life, meanwhile, the company has focused its AI efforts on the advice channel. The technology reportedly records, transcribes and summarizes meetings, creates to-do lists for advisors and drafts follow-up emails. They say it took three weeks to create a minimally viable product for pilot. They also say the technology allows advisors to conduct as many as two extra meetings each week. In other areas of the business, the company has also created “Sun Life Asks” for its employees, which delivers answers to employee questions about everything from polishing emails to preparing for year-end reviews and translating documents. 

Scanning the dark web 

At CFC Canada, Kate Della Mora, CFC Canada’s CEO says the nature of insurance has shifted from “a promise to pay” to the “promise to protect.” The company is using AI to actively scan the dark web for its customer base in real-time. “An insurance policy can restore a business but the faster a risk can be stopped before it happens, the better it is for everyone,” the paper states.

Westland Insurance was also part of the panel discussions held at the event. They say attracting and retaining talent remains their top concern, which is why the company is investing in employee-facing technologies to augment employee’s work. “This includes everything from data-driven product recommendation engines to conversational interfaces that provide consistent resource materials to deliver contextual insights in real time.”

Finally, Aviva Canada says it is looking across the board, from its brokers to its direct-to-consumer business to better understand client interactions. “Using AI to price better at the front end and speed up repair shop routing in claims at the back end has boosted net promoter scores exponentially,” they write.

Regulatory responses to AI 

The paper also discusses the regulatory response to AI, recommends ways to manage AI risk as it evolves, and includes a section on climate which suggests that AI modelling could also be used to help decide where and how to build to use resources efficiently. “Carriers need to double down on traditional strengths, responding to disasters with skill and speed. They also need to advocate for public policy solutions that make a difference to customers,” they write.