According to data collected by J.D. Power, insurance customers are keeping an open mind when it comes to AI’s role in their overall experience. However, while customers do have an open mind about its use, that doesn’t mean there aren’t concerns about how insurance companies will use AI and, more importantly, who will truly benefit.
When asked who will see the most gain from insurance companies integrating AI into their solutions, 68% of customers say they believe the insurance company gets most of or all the benefits, while 26% say the benefits are shared equally between the customer and the insurance company. While consumers recognize the potential value of AI, it’s clear that they have serious doubts that investments in the technology are going to be made for altruistic reasons.
That’s not to say that consumers don’t recognize that they could benefit from insurers adopting more AI. Customers are most comfortable with AI when it is used to automate routine aspects of their experience, such as sending automated claim status updates (24%), managing their billing (23%) and answering basic customer service questions (21%). In contrast, when it comes to important decisions, there is a lot of concern about leaving it up to the computers. Nearly half (47%) are somewhat or very uncomfortable with AI being used to process their claims, indicating a clear boundary between convenience and trust.
One-third (33%) of customers believe AI use in pricing insurance policies should be limited until companies can ensure it doesn’t introduce bias or violate ethical standards. Another 30% said AI should be limited to partial use that includes strong safeguards for fairness, explainability, and regulatory compliance. Just 15% of customers believe insurance companies should fully use AI to price their policies.
As AI becomes a more integral part of customers’ daily lives, there appears to be growing acceptance of this technology, making its way into their interactions with their insurance company. The difference, though, between customers’ willingness to use a virtual assistant and their hesitancy to accept AI in pricing their policy is that customers don’t immediately see a personal benefit in the latter that they do in the former. In fact, there is likely an inherent distrust in AI making an accurate read on underwriting decisions.
This should inform insurance companies’ strategies for further integration. Before doubling down on tech, companies need to peel back the curtain and explain the customer benefits of using AI in their decisioning. Insurers that can get that customer buy-in will have an easier time using AI to reshape their processes.
