Insurance leaders are concerned about the return on investment of their AI initiatives. While AI holds great promise, there’s also a lot of hype—and a lot of fear.
Executive Summary
Never has the pace of change been faster or more frightening. While insurance organizations have a vast menu of innovation opportunities available, the potential for missteps and organizational resistance is vast.Insurance leaders must take steps to build an AI-ready insurance culture, manage AI anxiety in the workforce, communicate strategically, and implement and scale rapidly to keep momentum building long after the first rollout.
In this three-part article series, Shravan Kumar Joginipalli and Amrish Singh, two leaders in the insurance technology space, discuss key human, technological and time-to-scale considerations, providing crucial guidance to help insurance leaders achieve return on their technology investments.Here, in Part 1, they focus on the human element, offering five steps to building an AI-ready culture.
Despite careful planning, many AI projects don’t succeed. A November 2023 article in Harvard Business Review estimates the failure rate to be as high as 80 percent, and almost double the rate of IT project failures just one decade ago. (“Keep Your AI Projects on Track” by Iavor Bojinov, assistant professor at Harvard Business School, Harvard Business Review, Nov-Dec 2023 magazine)
Many factors can undermine the success of AI projects. In some cases, contractors don’t understand the insurance business, or they are overextended. In other cases, workflow modifications haven’t been carefully orchestrated or integrated with other systems to ensure a seamless experience for customers and employees.
However, in many cases, there are no technical issues at all. Failures simply stem from the lack of employee buy-in and bottom-up support. The corporate culture is not AI-ready.
While team members may agree with AI advancements in theory, they still may be hesitant and reluctant, particularly because the pace of change has become so accelerated.