Exploring the impact ChatGPT and other large language models have on life insurersNew research from Celent reveals as insurers and other organizations continue to discover the benefits of AI systems in general, the use of LLMs and other large language models will increase in utilization in all industries globally.
BOSTON, MA – March 6, 2023 — Celent, a global research and advisory firm focused on technology for financial institutions, released its report on ChatGPT and other large language models (LLMs) and provides their perspective of what is next for life insurers. Celent publishes similar reports in EMEA, Asia-Pacific, and Latin America.
The launch of ChatGPT in November of 2022 by OpenAI has brought an acute and immediate focus on the impact of large language models to our industry. For life insurers, the questions are going to be about potential impact and how can LLMs be implemented.
ChatGPT and other LLMs represent augmented intelligence tools, which allow us to combine artificial intelligence (AI) with human intelligence to enhance and amplify human abilities, e.g., at a base level, generate content and get answers quickly, and at a higher level, improve our decision-making, problem-solving, and overall cognitive abilities.
Importantly, LLMs have a simple, user-friendly interface that allows anybody with internet access to use them which has increased public interest and willingness for adoption. Tools that deliver augmented intelligence have the potential to be transformational—and to improve or add value to many tasks undertaken by a person. LLMs will prompt organizations to reflect on the true value provided by human employees and may ultimately result in modified talent requirements. Depending on cost efficiency, the playing field could level with any size enterprise accessing LLMs via an API.
For insurers the risk of doing nothing with LLMs exists because the competitive gap established by early adopters could be sustainable due to an LLM’s inherent ability to learn and improve. Consumers will likely lead adoption, raising their service expectations across industries forcing insurers at some point to implement an LLM solution. Organizations that don’t may be less operationally efficient than peers using LLMs, which may lead to long-term challenges and diminished profitability.
There are many areas insurers can focus on the application of LLMs outlined in the report. Here are a few notable points:
- Customer service: LLMs can be integrated into advisers apps and insurers websites to provide quick response to customer inquiries. This can reduce the workload on advisers and their customer service teams in attending queries.
- Underwriting: LLMs can extend the path of automating the underwriting process by gathering information from applicants and determining their risk profile. LLMs provides large language model capabilities to analyze integrated data points for straight-through accelerated underwriting.
- Claims processing: Automate the initial stage of claims processing, such as gathering information from policyholders, data entry, and document verification.
- Marketing: LLMs can help marketing departments with content generation, email marketing, social media marketing, data analysis, and A/B testing.
- Policy information: Provide policyholders with quick and accurate information about their coverage, deductibles, and other policy details.
- Text synthesis and analysis: Used from a variety of documents and can be trained with organization’s information to identify specific items from documents submitted (especially with unstructured information commonly found in life and health domain).
For any industry, adoption of augmented intelligence tools requires mapping unchartered waters and extensive collaboration across enterprise stakeholders and regulators. LLMs are still relatively new and are rapidly evolving. Life insurerslooking to use LLMs are likely still exploring the best ways to deploy and regulate these technologies. As a result, it is highly likely that policies and practices around the use of LLMs may vary widely, within the insurance industry, across different industries and within their context.
Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally experienced analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly owned subsidiary of Marsh McLennan Companies. [NYSE: MMC]. For more information, visit www.celent.com. Follow Celent on Twitter @Celent_Research.