Insurers to leverage AI amidst workforce retirement

SAS also forecasts the rise of omni policies.

The insurance industry is bound to face a large talent gap with almost half of its workforce retiring in the next five years, warned SAS experts.

This signals firms to invest in AI and data-driven solutions to bridge the expertise loss.

SAS also forecasts the rise of "omni policies," where customers pay a single premium for AI-powered coverage across multiple insurable domains.

Insurers will also introduce "data for discounts" models, offering lower premiums to customers who share personal data, whilst raising costs for those prioritizing privacy. 

Wearable health technology will play a larger role, allowing insurers to refine risk assessments based on real-time data, though concerns over data security and ethics will remain.  

Insurers are expected to partner with non-traditional stakeholders, such as smart home companies, to expand market reach. 

Climate change will continue to challenge insurers, with companies likely to further limit homeowner and commercial property coverage in high-risk areas. 

Public-private partnerships may emerge to address the growing insurance protection gap, currently valued at $1.8t.  

Regulatory compliance will shape AI adoption, particularly in underwriting and claims processing. Insurers operating in the EU will adjust to the EU AI Act’s risk-based classification, focusing on AI governance, transparency, and bias reduction. 

Meanwhile, synthetic data will enhance actuarial pricing, allowing insurers to integrate external market data for more accurate risk assessments.  

As regulatory investments stabilise, insurers are expected to shift focus toward AI-powered business solutions, using generative AI to enhance underwriting, fraud detection, and customer engagement. 

These technological advancements will be crucial for insurers navigating market disruptions and climate-related risks.