AI drives 62% of insurers to cut staff levels
Source: Asia Insurance Review | Apr 2023
About two-third (62%) of insurers have cut staff due to the implementation of AI and machine learning (ML) technologies in the past 12 months according to a new global survey.
The survey of over 1400 IT decision makers across a range of sectors in the Americas, Europe, Asia, and the Middle East by Rackspace also received 52 responses from individuals at insurance companies.
The 2023 AI and Machine Learning Research Report published in February 2023 reveals that some insurers may be looking to reduce headcount as a result of AI and technology gains, but a talent and skill shortage in the area was seen as the ‘greatest challenge’ where it came to adoption so far, cited by 67% of insurer respondents.
Rackspace Technology chief technology evangelist Jeff DeVerter said, “When we look to computers or we look to technology to make an organisation more profitable and more efficient … some of these organisations have employed, in some cases, mountains of people to be able to do some of this work.
The report found that in more than 80% of insurer respondents AI and ML now lead their IT and business strategy, compared to 63% for cyber security and 58% for cloud.
More than half (52%) of insurers said they had realised ‘substantial benefits’ from AI/ML already, with another 23% saying they’d seen modest benefits, while 25% said it was too early to tell.
Despite reported benefits, more than half (56%) of insurance IT decision makers said they had received some form of ‘pushback or scrutiny’ over the penetration of AI in their business.
Blockchain, IoT and cloud technology were said to be more important than AI and ML in Rackspace’s survey two years ago, but these have since slid down insurers’ lists of priorities. A