Eight Things Insurers Must Do To Take Advantage of AI To Shape Sector’s Future – IT Expert

Participants at the just concluded 2024 WAICA conference in Accra, Ghana 

Information and Communication Technology (ICT) Expert, Mr. David Ofori-Atta, has identified eight things insurers must do to take advantage of Artificial Intelligence (AI) to shape the West African insurance industry’s future.

Speaking on the topic: “Shaping Insurance Industry’s Future: AI, The Way To Go,” at the just concluded 2024 West African Insurance Companies Association (WAICA) Education Conference in Accra, Ghana, Mr Ofori-Atta, who is also the IT Manager at KEK Insurance Brokers, Ghana, listed the eight things to include: Data Accuracy; AI Goals and Use Cases; Capability Assessment; Governance and Review; Technology and Integration; Skills and Team Readiness; Risk Management and Communication.

 “Data Accuracy: Organizations must ensure accurate and reliable data before building AI models to avoid reputational and regulatory risks.

“AI Goals and Use Cases: Leadership should define AI goals and prioritize use cases to generate short-term returns and build momentum.

“Capability Assessment: Begin with a clear understanding of current capabilities across six key pillars of AI maturity, supported by robust governance structures.

“Governance and Review: Establish governance with review mechanisms to monitor output reliability, flag concerns, and ensure adherence to agreed guidelines.

“Technology and Integration: Ensure technology and systems can integrate AI into current processes effectively, achieving optimal outcomes.

“Skills and Team Readiness: Verify the availability of skilled personnel before embarking on AI initiatives.

“Risk Management: Implement structured testing and validation processes to assess AI results, manage biases, and address any issues.

“Communication: Develop a communication strategy for stakeholders and the wider business to clarify AI’s role and future implications for roles,” he explained.

On the adoption of AI and automation in the sector, quoting KPMG’s Global Tech Report, KPMG International, September 2024, 165 Insurance respondents, Mr. Ofori-Atta said, “34 per cent leadership supports and has funded the strategy, yet implementation is behind schedule.

“23 per cent strategic vision exists but executive buy-in and/or investment approval limits progress.

“30 per cent are proactive in progressing against the strategy and are continually evolving.

“13 per cent of the strategy is being designed and pilot tested,  but a broad initiative has not yet started.”

“57 per cent of organisations see AI as the most important technology for achieving their ambitions over the next three years.

“58 per cent of insurance CEOs interviewed said it will take three to five years for Gen AI to provide a return on investment.

“85 per cent of insurance CEOs believe that Gen AI is a double-edged sword, in that it may not only aid in the detection of cyber attacks but also provide new attack strategies for adversaries.

“61 per cent of organisations are wary about trusting AI systems,  with 84 per cent citing cybersecurity as a top concern. (KPMG International – Advancing AI Across Insurance: Unlocking Transformation With Speed And Agility).

The IT expert defined AI as “the system created by humans to behave Intelligently like humans based on data.”

Ofori-Atta gave a breakdown of AI’s history and timeline: “In 1950, the Turing Test became the pioneering technique to determine a machine’s intelligence.

“In 1956, John Mccarthy coins the term ‘Artificial Intelligence’

“Joseph Weizenbaum 1964 invented a chatbot capable of conversing with a human.

“The first chess machine Deep Blue defeated the reigning champ “Garry Kasparov,” in 1997.

“In 1999, the first pet dog capable of developing personality and skills was developed by Sony.

“Roomba, the first mass-produced vacuum cleaner, in 2002, started navigating homes.

“In 2011, Siri intelligence virtual assistant,  was integrated into iPhone. In that same year, Watson,  a question-answering computer, bags up first place on Jeopardy.

“Alexa, Amazon’s intelligence virtual assistant, owns and accomplishes shopping tasks in 2014.

“In 2020 and 2024, OpenAI announces GPT-3 tool for automated conversation and releases GPT-40 capable of deciphering multiple modes. Generative Artificial Intelligence (GenAI) Vs Artificial Intelligence (AI)”

Speaking on the shape of the insurance sector in Ghana, the IT expert stated “In August 2024, the National Insurance Commission (NIC) admitted five innovative solutions into its Insurance Sandbox: They are Moovon Insure, ETAP and Hollard Insurance, RedPear, Trade Guarantee Limited (TGL), and  FigTech Insure.

“Moovon Insure: Offers a flexible premium financing arrangement in partnership with a financial institution and five insurance companies.

“ETAP and Hollard Insurance: Collaborated to introduce usage-based motor insurance utilizing telematics solutions.

“RedPear: Developed an aggregator platform in collaboration with three insurance companies.

“Trade Guarantee Limited (TGL): Launched a pay-as-you-go motor insurance product built on third-party motor insurance, in partnership with three other insurance companies.

“FigTech Insure: Created an aggregator platform to sell primarily life insurance products for three insurance companies.

Insurers, he said, are expected to Think Digital, Think Data-Driven, Customer-Centric, and Capacity Building.

“Think Digital: Culturize your digital agenda and Promote digital initiatives.

“Think Data-Driven: Move from manual to digital, Improve Systems for Data Utilization, and Make Data-Driven Decisions.

“Customer-Centric: Provide solutions for sophisticated customers, and Customer-centric culture.

“Capacity: Train and retrain, and Ensure digital literacy across the board.

 He listed the challenges, limitations, and fears to include Data Privacy and Security Risks; Bias and Fairness Issues; Operational Risks and Job Loss.

“Data Privacy and Security Risks: Customer Data Exposure and Regulatory Non-Compliance

“Bias and Fairness Issues: Discrimination and Unfair Pricing Models.

“Operational Risks: Model Inaccuracy and Dependency on Technology  (Hallucination).

“Job Loss: Replace of Humans with Machines,” Mr. Ofori-Atta added.

The Roadmap to proper adoption of AI in the industry, according to him, is to dream, determine, develop and do it.