Insurance industry outlook

AI refers to the theory and development of computer systems that perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making and language translation. As a transformative technology, AI is the critical differentiator in the insurance industry—when applied in tandem with humans. AI's ability to analyze data quickly and accurately has rich potential for the insurance sector, as it enables the vast amounts of data to be leveraged in efficient and innovative ways. Half (52 percent) of insurance industry respondents in Accenture’s Total Enterprise Reinvention CxO Survey say that unlocking new growth opportunities is the most important benefit executives expect from investing in data and AI. Despite the economic downturn, 87 percent of insurance industry respondents also say that they plan to implement new and innovative cloud, data, AI or tech initiatives, including hiring, acquiring or training talent.

The workforce is at the center of the reinvention of the insurance industry, with the Chief Human Resource Officer (CHRO) being seen as an important agent of growth and change. In Accenture’s recent The CHRO as Growth Executive report, 89% Of CEOs say their CHRO should have a central role in ensuring long-term profitable growth. This translates to a strategic focus on developing and optimizing the insurance workforce.

There are two key trends in the insurance workforce – the rise of AI and a growing talent shortage. Insurance is historically data-intensive. The introduction of AI has enabled mundane administrative tasks to be automated, freeing up employees to do more challenging, rewarding work.

The growing talent shortage trend in insurance is becoming a pressing challenge for the insurance industry. While some functions will be replaced or enhanced by intelligent technologies, there is still going to be an anticipated gap in human skills, with thousands of positions expected to be left unfilled. This is largely owing to a great amount of insurance and underwriting skill sets being held by middle and retirement-aged people, with less than 25% of the insurance industry being under 35 years of age. For innovative, analytical thinkers who are wanting to make an impact in financial services, this means that insurance could be a viable future career path.

Accenture defines the Metaverse Continuum as a spectrum of digitally enhanced worlds, realities and business models that are redefining how people work, operate and interact. While still in its early stages of adoption, the metaverse holds the potential to help insurers build new models custom-fit for the digital age. The metaverse will elevate expectations for how customers interact with insurance products and experiences, and bring advances in employee training, shifts in revenue pools, and new distribution models in the next five years.

The integration of sustainability is a fundamental part of the insurance business model. It is not only ethically important, but it is also a way for insurers to proactively mitigate risk by improving community and environmental conditions. The latest United Nations Global Compact-Accenture CEO Study on Sustainability, recently shared at Davos, presented an urgent call for businesses and governments to take action on Sustainable Development Goals (SDGs). To remove barriers on taking action, CEOs are calling for a new roadmap to achieve the SDGs and asking government to accelerate the green transition. Within insurance, a key indicator of success will be financed emissions. This refers to emissions linked to the investment and underwriting activities of financial institutions such as insurers.