NEWS
Insurance leaders expect Gen-AI to deliver windfall in productivity
Some 83 percent of insurers in Europe are bracing for a significant impact caused by Gen-AI.
Leaders across Europe’s insurance sector expect generative artificial intelligence (Gen-AI) technologies to deliver a windfall to productivity, according to the new “EY European Financial Services AI Survey”, which finds that 83 percent of respondents are bracing for a significant impact to their workforce and operations.
The survey, which canvassed the views of executives from 24 European insurance firms—including listed firms representing an aggregate market cap of £239.3 billion ($292 billion)—found that over half (58 percent) of respondents expect that up to a quarter of all roles will require AI training or upskilling over the next six to 12 months, with 21 percent believing it could be as much as half.
However, action to realise productivity gains and workforce development through training and upskilling remains limited. Nearly half of the respondents (42 percent) said they currently have no plans in place to train their workforce in new and rapidly evolving Gen-AI technologies, while a further 38 percent described their plans as being “in their infancy”.
Taking a more focused approach, just 4 percent of leaders stated that they have training in place for targeted groups and only 17 percent reported having developed plans in use. Only 21 percent of respondents believe that their current workforce has the right skills and capabilities to implement Gen-AI.
New capital allocation to Gen-AI
The survey confirms that expenditure on Gen-AI is already widespread within Europe’s insurance sector. Looking ahead, sector spending on integrating these technologies is set to rise over the near term.
Phil Vermeulen, EY EMEIA Financial Services insurance leader, said: “Insurance leaders across Europe are continuing to invest in AI, as they seek to improve operational efficiency, increase productivity, and enhance customer experiences through tech. To realise the full potential of AI, insurance firms must continue to train and upskill their workforce, across all levels.
“Insurance leaders across Europe are continuing to invest in AI.”
Phil Vermeulen, EY
“Gen-AI technologies have the power to transform the insurance sector on a number of levels.”
The impact of AI on entry-level and graduate talent is in focus for insurers. Over three-quarters (79 percent) of executives surveyed said they expect new technologies to have a significant impact on the roles and tasks undertaken by those joining the workforce. To manage the impact, over half (54 percent) of executives plan to integrate AI training into their graduate programme, while a quarter (25 percent) are planning a more widespread restructuring of roles and responsibilities across entry level positions.
Another 33 percent of respondents, however, said they have not taken any action to offset potential knock-on impacts.
When asked to consider the top attributes that firms will seek as they recruit entry level talent for a Gen-AI-enabled workforce, the traits most cited by European insurance leaders were a collaborative and interdisciplinary mindset, followed by being tech savvy and experimental.
The area of expertise most in demand from skilled talent, specifically in reference to AI integration over the next two years, is data science and innovation (the top choice for 50 percent of executive respondents), followed by information and technology (21 percent) and operations (17 percent).
Omar Ali, EY EMEIA Financial Services managing partner, commented: “After more than three decades of major digital transformation across financial services, the rise of Gen-AI is demanding yet another new set of skills for firms.
“Across Europe’s financial boardrooms, Gen-AI is prominent on every agenda. European financial services leaders are focused on developing the next generation of talent, for whom the use of innovative technologies in how they work and learn will become second nature. It is encouraging to see high levels of forward planning and development of graduate programmes which are focused on building new skills that will be needed to compete both in market and internationally.”
“The rise of Gen-AI is demanding yet another new set of skills.”
Omar Ali, EY
Ethics a top concern
When asked to consider the top concerns presented by Gen-AI integration, European insurance leaders were most likely to cite limited understanding and experience of Gen-AI applications and their impact across the workforce (42 percent), followed by uncertainty about existing and pending potential regulatory impacts (33 percent), and managing legacy system modernisation (13 percent).
Concerns around the ethics of Gen-AI are centred on privacy (cited by 32 percent of all respondents) as well as transparency and explainability (32 percent), and the potential for discrimination, bias, and lack of fairness (18 percent).
To manage potential ethical implications arising from Gen-AI integration, 29 percent of respondents claimed they have already put an AI ethics framework in place; equally, 29 percent are in the early stages of development. However, 38 percent of respondents stated that their firm is yet to develop an AI ethics framework.
In terms of accountability, over half (54 percent) of respondents reported that their firm’s technology team will be responsible for the integration of AI across the business, reporting to the chief information officer (or equivalent position). A quarter (25 percent) of respondents that operations will be responsible for the integration of AI across the business, and 13 percent said their firm remains in the process of defining lines of accountability.
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