target audience: TECH BUYER Publication date: Feb 2024 - Document type: IDC Perspective - Doc Document number: # US51439124
IDC Perspective: Unveiling GenAI Value Streams in Insurance
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Abstract
This IDC Perspective examines the challenges the insurance industry faces in incorporating generative AI (GenAI) as it navigates between potential benefits and regulatory hurdles. Despite some insurers cautiously adopting GenAI, ongoing obstacles temper initial excitement. GenAI offers the potential to transform revenue streams, enhance cost efficiencies, and improve risk management. A structured approach — such as the GenAI Insurance Maturity Scorecard — categorizes insurers into Early Explorers, Adaptive Innovators, and Revolutionary Insurers, offering a road map for their GenAI integration journeys. Through the utilization of a three-horizon framework, insurers can strategically incorporate GenAI, moving from incremental to disruptive innovation, thus facilitating transformative outcomes while carefully balancing risk and reward.
"At its core, the insurance industry grapples with the transformative potential of generative AI, navigating the delicate balance between reshaping business models and enhancing profitability against the backdrop of challenges such as regulatory compliance, skill shortages, and ethical considerations. The adoption road map, as categorized by IDC's GenAI Insurance Maturity Scorecard, offers insurers a structured approach to navigate this intricate landscape, guiding them from early exploration to becoming pioneers in cutting-edge GenAI integration," said Davide Palanza, Global Insurance Lead, IDC Financial Insights.