The Future of Insurance Professionals in the Age of AI: A Balancing Act
As the insurance industry accelerates its adoption of artificial intelligence (AI), the roles of actuaries and underwriters are being redefined, raising questions about job security and the evolving skillsets needed. A recent study reveals that 7 in 10 professionals in these fields fear being replaced by AI within the next five years, while 96% recognize that their pricing technology requires significant improvement.
The insurance industry is at a crossroads, where AI promises efficiency, but also highlights concerns about burnout, technical skill gaps, and an uncertain future for human professionals.
AI: Friend or Foe?
With 91% of insurance companies already investing in AI or planning to in the next five years, fears of being replaced are not unwarranted. A staggering 67% of actuaries and 69% of underwriters express concerns about AI taking over their roles, leading to anxiety about skill obsolescence. Actuaries are particularly worried about the need to master coding and advanced tech skills, while underwriters are apprehensive about shifting from traditional risk assessment to portfolio underwriting.
Yet, AI also presents opportunities. By automating routine tasks, AI allows actuaries and underwriters to focus on more complex, value-driven work. AI-driven pricing platforms can enhance data analysis, enabling professionals to build models that would have been impossible just a few years ago. As hyperexponential CEO Amrit Santhirasenan notes, “Far from being replaced, actuaries and underwriters can add significantly more value by embracing and leveraging AI.”
Bridging the Skills Gap
However, the integration of AI doesn’t come without challenges. Eighty-four percent of actuaries worry about lacking the right pricing platform, while 80% are concerned about the need to code in various programming languages. For underwriters, compliance and the transition to portfolio underwriting present significant hurdles.
Upskilling the workforce will be crucial to maximizing the benefits of AI. Industry leaders emphasize the importance of targeted training programs to help professionals adapt to new technology. Cross-departmental collaboration between actuaries and underwriters, who often work in silos, will be key to creating more cohesive and effective workflows.
The Tech Conundrum
Despite the benefits of AI, there are frustrations with current pricing technology. Nearly half of the professionals surveyed reported that their platforms failed to deliver on promises, while others struggle with integrating new systems alongside legacy technology. Shockingly, 8% still rely on outdated tools like Excel.
A call for a complete tech overhaul is growing louder. To truly unlock AI’s potential, insurers must invest in modern, integrated systems that support optimal pricing strategies and seamless collaboration.
Enhancing Collaboration for Better Outcomes
The relationship between actuaries and underwriters has room for improvement. Seventy-six percent of actuaries and 77% of underwriters believe collaboration could be better, and a significant number of underwriters admit to distrusting pricing models due to their perceived inaccuracy. This disconnect undermines the potential of AI-driven tools.
Industry experts recommend regular cross-departmental meetings, joint training sessions, and integrated project teams to foster a more collaborative environment. These steps will ensure that AI models are used to their full potential, benefiting both actuaries and underwriters.
AI: A Future Worth Embracing
As AI continues to reshape the insurance landscape, professionals will need to navigate both challenges and opportunities. While fears of job displacement are real, the potential for AI to enhance, rather than replace, the work of actuaries and underwriters is equally significant.
By embracing AI, upskilling the workforce, and fostering collaboration, the insurance industry can create a more efficient and productive future—one where human expertise and AI work hand in hand to drive innovation and growth.
The key will be in intentional implementation, ensuring that AI complements the work of actuaries and underwriters, rather than replacing it.
The Takeaway
The future of insurance is undeniably digital, but it need not come at the expense of human professionals. With proper planning, investment in technology, and a focus on upskilling, AI has the potential to transform the industry for the better, allowing actuaries and underwriters to not only survive but thrive in an AI-driven world.
As the sector evolves, striking a balance between AI integration and human expertise will be crucial in maintaining a dynamic and successful insurance landscape.
