In the property/casualty insurance industry, AI’s ability to analyze vast datasets to evaluate risk is a game-changer. It enables insurers to price policies more accurately, reduce quote turnaround times, triage claims, and reduce the duration and cost of claims. However, the transition from traditional methods to digital processes isn’t always smooth. In this article, we’ll explore the challenges of implementing AI solutions and propose change management best practices, with a focus on how to overcome resistance to change with a change agent.

Unveiling AI Adoption Challenges

When P/C insurers embark on AI initiatives, they often encounter resistance to AI adoption, citing concerns like, “We’ve always done it this way,” “It will never work,” or “What a waste of money. Just another project that will fail.”

These are a few of the things we’ve heard customers say when they first start to work with AI and machine learning models. While many insurance companies are looking to embrace improved efficiency and profitable growth, they face significant challenges that lead to resistance to adopting AI and automation solutions. Other industries seem to have embraced digital transformation more easily, however, the insurance industry still lags due to various factors. Here are a few reasons why:

Business models: Many insurers delay their digital adoption due to existing business models that require major restructuring to align new goals and flexibility.

Scattered data: Insurers often struggle with assimilating and analyzing vast amounts of unstructured and scattered data. This data management problem can be problematic when attempting automate.

Fear and uncertainty: Often employees and leaders do not understand the business imperative for change and fail to see the personal benefits, leading to fear and resistance. They may worry that AI will either micro-manage them or take their jobs away, further fueling their reluctance to embrace new technologies.

Navigating Change With Artful Strategy

Change management is an art — not a science. How we introduce changes can make or break our efforts. We can’t just send an email to announce the change and hope for the best. We need to be mindful of how people react to change and be intentional with our change management plan.

Before you begin the process, consider completing a change readiness assessment. It’s also important to understand the impacts of the change upstream and downstream as well as identify the key stakeholders and their roles.

A recent Prosci study found that 88 percent of companies with excellent change management programs exceeded expectations, compared to only 13 percent of those with poor change management programs.

The process of driving change through AI and automation in insurance processes requires transparent communication and support. This is why a change management program accompanied by a change liaison or change agent is necessary to achieve desired outcomes.

Empowering Change Agents

Change agents are individuals that promote and support a new way of doing something within an organization. They are critical to driving successful AI and automation initiatives. Change agents take the initial steps for the change process and oversee it to its completion. Here are some of best practices and key responsibilities of change agents.

Integrate change plan activities into the project plan by attending workstream planning sessions, identifying necessary activities and helping everyone stay on schedule.

Identify change impacts on people, processes and technology. For example, they will analyze current and future states and address concerns such as AI training needs and resource requirements.

Plan and support engagement and communication by sending relevant communications to insurance stakeholders at the appropriate times. They will actively demonstrate support for the change outlined in the communication plan.

Identify risks during workstream planning and create mitigation plans to reduce resistance to change. They will address risks such as potential employee turnover and develop plans to mitigate them.

Lead by example, embodying the change they wish to see. They will create a unified message of change, remove obstacles and display an unbiased attitude while welcoming feedback, emphasizing leadership and innovation in the insurance industry.

Modernizing your P/C insurance business is not just about adopting new technologies; it’s about embracing change and innovating for the future. By overcoming resistance through effective change management strategies, including communication, engagement and clear expectations, insurance companies can unlock the full potential of AI and automation.

A version of this article was originally published as a blog item on the Gradient AI website Change Management: AI Adoption in P/C and Work Comp Insurance (gradientai.com)