Insurance companies will spend on average $90 million on artificial intelligence technologies by 2020, according to research from Tata Consultancy Services.
In its study, “Getting Smarter by the Sector: How 13 Global Industries Use Artificial Intelligence”, the IT consulting firm projects insurers will place fourth behind telecommunications ($131 million), high tech ($119 million), and banking ($99 million) in AI spending by the end of the decade.
TCS’ report surveyed 835 companies, including 54 carriers, to identify investment trends and projected use cases of AI in insurance, automotive, banking, energy, and manufacturing, among other sectors. The anticipated per-company spend on AI across all industries is $88 million, TCS estimates.
More than any other industry, insurers are expected to use the majority of their AI budgets on improving current products as opposed to creating new services, TCS says. Carriers believe such investments should have the biggest impact on customer service, IT, sales, marketing, and R&D.
As it stands, 85% of insurance companies surveyed use AI technologies to some capacity, compared to the 88% cross-industry average. One-hundred percent of insurers interviewed say they expect to leverage AI by 2020.
“Call it the Uber effect,” TCS writes. “Insurance company leaders have seen centuries-old industries suddenly disrupted by scrappy startups. And while the industry may not be considered an emerging technology early adopter, insurers are making significant investments in AI to disrupt themselves before they are disrupted.”
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