Modernization in insurance is possible, especially with innovative leaders pushing the industry forward. (Credit: mozZz/Adobe Stock)

The insurance industry is at a turning point. With an estimated 50 percent of the workforce set to retire by 2028, the sector risks losing decades of institutional knowledge. At the same time, social inflation is driving up claims and litigation costs nationwide.

In an environment like this, insurance leaders can't afford to stay the course. A new way of working is crucial to meet customer demands, attract top talent, tamp down costs, and stay competitive.

AI can enable all of that. The key ingredient: an industry-wide willingness to turn innovation into reality.

That might seem like a tall order in a highly risk-averse insurance culture. But modernization is possible — especially with innovative insurance leaders pushing the industry forward. Three things that will help: intuitive and trustworthy software, the right education, and lots of experimentation.

Invest in approachable, trustworthy software.

One of the most effective ways to modernize the insurance industry is with software that’s thoughtfully designed. If technology is intimidating or cumbersome, insurance professionals will default to their existing workflows.

In the context of AI applications for insurance, it’s important to choose software that’s…

  • Intuitive: Even the least tech-savvy professionals should be able to learn and use modern software without a steep learning curve.
  • Verifiable: AI outputs must be backed by sources in order to build trust. For example, an AI policy analysis tool should provide citations that link directly to the relevant page and paragraph (ideally with highlighted text for easy reference).
  • Comfortable: The most effective AI solutions mimic existing workflows. If a broker is using AI to, say, compare policies or analyze coverages, they’ll likely expect to receive a report that’s just like one an expert or attorney would provide. When the format of each output feels familiar, it’s easier to transition to a new tool.

With software that meets these standards, AI adoption will face a much smoother path forward.

Demystify AI through education.

Although AI use is growing across industries, many insurance professionals are still largely unfamiliar with this technology — especially when it comes to generative AI chatbots. And even those who have used it may lack the training to do so effectively: Picture prompts that could be structured for more precise responses.

Effective modernization depends on addressing this knowledge gap, and quickly. When it comes to new software, people fear what they don't know. So the better insurance professionals understand AI, the sooner they'll grasp its potential — and feel empowered to reap the benefits.

The key is smart AI education. It's important to...

  • Invest in hands-on training. Interactive seminars and hands-on workshops can show people how AI applies specifically to their daily tasks.
  • Position AI as a knowledge partner. Insurance AI won't replace human expertise. Insurance professionals will always be needed to interpret complex policies, compare coverages, and offer guidance. AI simply speeds up the process.
  • Choose AI that actively educates users. The best AI tools make learning as simple as possible by teaching as they go. If you're exploring generative solutions, look for platforms that suggest helpful prompts up front or offer to refine user queries for more precise outputs.

The bottom line? AI education will break down barriers to industry-wide modernization.

Experiment, experiment, experiment

Modernization doesn’t have to be a big undertaking. In fact, it’s often easiest to start small.

My recommendation? Pinpoint a handful of tedious activities where better tech could make life simpler. Then, gradually introduce AI-powered software, measure the impact, and make adjustments as needed.

Along the way, it’s important to stay curious and keep an open mind about AI’s potential. Some in the industry are already doing just that. I talked to one major carrier's CEO who mandated that every department integrate at least one AI tool into their workflow. I don’t think he’s the only leader making such moves.

The takeaway: When it comes to AI, forward-thinking companies are not waiting for the industry to catch up. They're experimenting for themselves so they can gain a competitive edge.

The future belongs to those who innovate

Modern tools can help insurance professionals work faster and smarter as they adapt to today’s market conditions. In the next few years, AI will be embedded in everything from coverage analysis to claims adjusting. And over time, we will see AI democratize insurance knowledge for new hires and customers alike, piercing the veil on how coverage actually works.

But this future belongs to those who turn innovation into reality. And while resistance to change is natural, the carriers and brokers that embrace cutting-edge technology first will have a huge advantage moving forward. Will you be among them?

Dan Schuleman is the co-founder and CEO of Qumis, a lawyer-built, AI-driven insurtech reimagining how insurance policies are read and interpreted. Prior to founding Qumis, Dan served as Associate General Counsel at Kin Insurance and played a key role in scaling the company while navigating complex regulatory landscapes. He has extensive expertise in property and casualty law and was a practicing insurance coverage attorney at Am Law 200 firms. Dan holds a J.D. from the University of Illinois College of Law and a B.A. with honors from Northwestern University.

These opinions are the author's own.

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