A new survey across five key APAC markets has revealed that insurers in APAC are using AI extensively and reaping benefits, yet they are also facing challenges in employing the technology.
The survey Use of artificial intelligence is prevalent and yields benefits, but with challenges
conducted by Moody’s Ratings has gathered insights from a total of 21 organisations across five major markets of APAC and includes 12 life insurers and nine P&C insurers.
The new report reveals that over 80% of the respondents are using AI and realising benefits — a contrast with the common perception that traditional insurers are not very innovative and usually slow in adopting new technologies.
The 9-page report shows that while insurers in APAC are using AI extensively and reaping benefits, they are also facing challenges in employing the technology. The five major markets included in the survey are China, Hong Kong SAR, Japan, Korea and Taiwan.
The key findings of the survey include the following:
Operational efficiency is the most frequently cited benefit, with 81% of respondents reporting more efficiently or increase productivity. 57% have reported enhanced customer experience.
Marketing, sales, and distribution is the top use case
Motor and health insurance are leading product areas for AI adoption, driven by large volumes of data involvement, creating an ideal environment for AI
Chinese insurers have benefitted from AI more extensively than their peers in other parts of APAC.
Most respondents were found to be concerned about data quality and accessibility when using AI, followed by a lack of transparency around AI models and outputs.
The survey respondents that have not yet adopted AI cited a shortage of skilled talent and the need for IT system upgrade and technology as obstacles. The insurers also said insurers with legacy systems need to upgrade their IT infrastructure to deploy AI, which involves modernizing
outdated technology, ensuring data compatibility and growing technology-related talent pools.
The report also says that the regulations and laws governing AI are evolving rapidly worldwide, as authorities aim to mitigate risks associated with cyber security and AI model governance while encouraging the adoption of the technology.
“This dynamic regulatory landscape presents additional challenges for insurers deploying AI. Over the past year, several new regulations and guidelines have been introduced in various APAC markets, necessitating continuous efforts by financial institutions, including insurers, to adapt to these regulations and reinforce the guardrails around AI applications.”