Skip to main content

Reimagining Insurance in the Age of AI

Roland Alston, Appian
October 26, 2023

In today's competitive business landscape, organizations are under increasing pressure to accelerate their speed to market. But business leaders must balance the drive for speed and efficiency with the need for interdepartmental collaboration, transparency, and regulatory compliance. 

At Appian World 2023, Ben Farnsworth, an actuarial transformation specialist from KPMG, and Jake Sloan, Industry Vice President, Insurance at Appian, took us to school on the balancing act businesses must perform to both increase speed to market for higher profits and ensure interdepartmental cooperation.

Insights from Appian World 2023.

In their insightful Reimagining Modern Insurance breakout session at this year's Appian World event, Sloan and Farnsworth emphasized the importance of insurers creating a clear and transparent environment while fostering an understanding of the company's inner workings among all its teams. For example, they talked about how Appian's data fabric functionality consolidates disparate data sources and workflows, enabling better, more informed decision-making by insurers.

"Automation and innovation should be viewed as complementary to human labor, not as a replacement." - Jake Sloan, Appian

The discussion also touched on the benefits of leveraging tech to optimize workflows and improve productivity while mitigating business risks. Additionally, Sloan and Farnsworth fielded questions from the audience, highlighting the challenges of the negative audit experiences often caused by incorrect assumptions.

The conversation also highlighted the challenges of:

  • Achieving continuous innovation while maintaining compliance.
  • Harnessing technology for knowledge preservation.
  •  Using technology to complement human labor rather than replace it.

As a KPMG's actuarial transformation practice member, Farnsworth works closely with finance and IT teams to bring about broad transformational change in finserv organizations. The goal, says Farnsworth, is to create environments that encourage effective interdepartmental collaboration, ensuring that every cog in the machine understands and appreciates the role of the other.

But creating such a collaborative environment can be challenging.

"The goal isn't just about simplifying tasks or automating jobs; it's about harnessing technology to stimulate innovative product designs, produce more accurate pricing, and yield a better understanding of business risks." - Ben Farnsworth, KPMG.

Leveraging technology for better business outcomes.

"A common stumbling block we encounter," said Farnsworth, "is the sheer opacity within many organizations. This opacity breeds frustration among senior leadership teams, who see their technical professionals consumed with work yet seemingly need help to manage and prioritize their tasks effectively. It's crucial to address this issue head-on and to create transparent work environments that allow everyone to understand and appreciate the organization's bigger picture.”

The good news is that emerging technologies are creating a path to overcome these challenges. Farnsworth pointed to Appian's data fabric functionality, which consolidates disparate data sources and workflows, effectively bringing an organization's various components together in previously impossible ways. He said the goal isn't just to simplify tasks or automate jobs; it's to harness technology to stimulate innovative product designs, produce more accurate pricing, and yield a better understanding of business risks.

Farnsworth stressed that companies should also leverage technology to mitigate potential audit issues. Too often, he said, businesses grapple with negative audit experiences rooted in incorrect assumptions based on inaccurate data. Farnsworth noted that companies can streamline their data and workflow management by harnessing the right technology, effectively reducing such risks.

Ensuring compliance in the age of AI.

However, it's not enough to implement innovative solutions. Businesses must also consider regulatory compliance beyond mere policy adherence. Compliance with accounting standards, like the new Generally Accepted Accounting Principles (GAAP), is equally crucial. It's important to dispel the notion that a single individual can hold all the institutional knowledge. This legacy approach to knowledge management is not only risky but also unsustainable.

Another area where insurers can leverage technology is documentation, a critical aspect of knowledge preservation, compliance, and continuity in insurance. Technology can help ensure that important documents and data are easily accessible and not buried in disparate folders and shared drives. Artificial intelligence (AI) plays a crucial role here. But a question frequently raised is, "Will automation replace certain job functions?" The answer, argues Sloan and Farnsworth, is to view automation and innovation as complementary to human labor, not as a replacement. 

"With the help of technology, generating financial reports or determining pricing need not be Herculean tasks. Instead, they can become iterative processes, steadily improving with each cycle." - Jake Sloan, Appian

The way forward: balancing innovation and compliance.

The biggest takeaway from the conversation with Sloan and Farnsworth is that the path to effective business transformation lies in balancing innovation with compliance while fostering a culture of collaboration and transparency. While technology, such as AI and data fabric, can be instrumental in this transformation, viewing them as tools that augment human capabilities rather than as replacements for human labor is essential.

The path to effective business transformation lies in balancing innovation with compliance while fostering a culture of collaboration and transparency. That's also the best way to drive innovation, ensure compliance, and build more efficient, resilient, and successful organizations.

If you'd like to delve deeper into our discussion and understand how technology and collaboration can drive your organization's transformation, watch the entire on-demand video, Reimagining Modern Insurance: How to Transform Today's Challenges into Enhanced Capabilities, Capacity, and Profitability, and embark on your transformative journey today!