
Gen AI Revolutionizes Insurance Sector, Tries to Build Consumers’ Trust
By Shubhendra Anand , 31 March, 2025
Insurer executives worldwide report that generative AI is critical to maintaining their edge in the insurance market, and as such, 77% of them rank its significance. But customers, in this case, the clients of insurance companies, are more cautious: only 29 percent of clients of the generative AI trust virtual assistants to serve them in such capacity. An IBM study conducted in 2024 sheds light on the relationship between customers' wishes for the personalization of risk products and the customer experience that insurance companies focus on.
The study considers different groups from the survey and draws various results. One that consisted of 1,000 C-suite executives from the insurance industry and another group of 4,700 customers showed potential industry transformation due to the adoption of generative AI. Investments into generative AIs will increase more than three times from 2023 to 2025, demonstrating intensive change in the industry. On the other hand, the excitement in the industry does not translate into customer interest. Only 29 percent of policyholders are open to the concept of generative AI virtual agents delivering services, while a mere 26% have faith in the quality and context of AI-produced solutions. These results point to a more basic fear arising from privacy concerns, bias and absence of personal interactions.
Insurers may try to bridge this gap with consumers by adopting several solutions. It is noticeable that trust is earned as well as trust must be established to anticipate and mitigate the concerns of the customer. Customize risk products that suit the customer so that a sense of control and agency can be developed amongst the customers. Create Governance structures that are appropriate and responsible so that there is clarity, accountability, and fairness in AI-driven decisions. You can embed AI functions in human activities to enhance customers' confidence that AI is not overriding life specialists.
The increasing use of generative AI in the insurance industry will likely significantly affect the world economy. The insurance industry's future will depend on how technological advances are exploited across regulatory frameworks and consumer demands. Further evolution of the insurance sector with generative AI will further revolutionize the global economy.
Graph below shows impact of Gen AI in the insurance industry in different sectors:

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