Artificial intelligence is one of the most revolutionary forces for the insurance trade in New Zealand, according to a new report from the AI Forum of New Zealand.
The report recommends the Government to consider a specific government-supported focus on the future of the financial services sector, including the role that AI has to play.
AI Forum Executive Director, Emma Naji, says the evolution towards autonomous vehicles, connected vehicles and homes, shared and on-demand economies, and peer-to-peer insurance models are adding a new dimension to the competitive landscape.
“Insurers need to reinvent and redefine their business to respond to the changing marketplace. Insurers face pressure to cut costs and become more customer centric to remain competitive and relevant,” said Naji.
She said the industry must transform from a product-centric mindset to a customer-centric mindset.
“The insurance industry is using AI to automate claims processing and recommend products. By leveraging machine learning, insurers are finding they can gain a competitive edge over their competitors by developing real-time actions on behavioural and demographic data,” explained Naji.
“AI-driven innovation can help make the New Zealand financial and insurance services sectors become nimbler, customer driven, and effective.”
The report noted that fintech companies in New Zealand need to focus on developing and exporting AI-driven financial services products, to markets like the UK, with big potential for sales.
It also called for large insurers and banks to seek partnerships with local fintech and insurtech communities to foster AI innovation and collaboration.
“An increase in New Zealand investment in AI research for financial and insurance use cases is needed. Financial organisations should focus on talent development, including technical and AI savvy management,” said Naji.
“With increased levels of investment and effective regulation, AI-driven innovation can help make the New Zealand financial and insurance services sectors become nimbler, customer driven, and effective.”
Click here to view the full report.