Insurers among those using rapidly growing tech for decision making
The increasing role of artificial intelligence in investment strategy has been highlighted in a new report focusing on how insurers are embracing the technology globally.
The survey conducted by Ortec Finance covers investment professionals managing over US$10 trillion in assets and reveals a marked shift with almost half (45%) of respondents believing that AI will be critical to investment strategy and asset allocation within the next five years, while another 48% see it as significantly important.
According to the findings, 99% of firms are currently integrating AI into their investment processes, and 91% began doing so over a year ago. But this is not an entirely new trend as around a third have been leveraging AI for more than two years, signalling maturity in its adoption.
Notably, 60% are using AI to evaluate investments, 62% for client engagement, and 55% for marketing purposes.
Every organization surveyed expects to boost its AI investment, with almost half forecasting an increase of 75% or more in budget allocation for AI tools over the coming year. This is in addition to heightened spending already observed over the last 12 months, where 90% reported a rise in AI-related expenditures.
When asked where AI brings the most value, the top responses included:
- investment evaluation (41%)
- risk management (21%)
- and reducing operational costs (12%).
Marketing, client engagement, underwriting, compliance, and reporting are also frequently cited as adding value.
Another recent report found that Canadian banks have been investing heavily in AI, but mostly on customer facing tools, although this was not deemed to be where the highest return on investment could be achieved.
GFT Canada said that internal efficiencies through using AI for mundane tasks and other operational boosts were the real opportunity for the sector.
“The continuing evolution of AI technology presents a world of opportunity to banks, but in order to effectively harness that power, the institutions first need to understand where exactly in their business AI will be the most beneficial,” said Andre Gagne, CEO of GFT Canada. “What we are continuously seeing through our on the ground work with financial institutions is that in order for banks to stay competitive, operational excellence is key. While customer-facing tools are a great way to improve relationships, to truly see gains that impact the bottom line, banks should turn their focus inward to their day to day processes.”
