"The balance between technology and human interaction needs to be carefully managed. No one wants the AI saying 'No' to a claims payout with no human intervention."
- Emma Thompson - PDG
New research by the Protection Distribution Group (PDG) reveals significant generational differences in attitudes towards artificial intelligence and where advisers feel most comfortable using it.
Advisers generally favour AI in underwriting more than in claims. The study found that 46% of advisers welcome its use in underwriting if it speeds up processing, while 25% were undecided and 24% expressed concern about AI making such decisions. In comparison, only 35% would welcome AI use in claims to accelerate the process, while 36% were worried and 23% were unsure.
Principals, due to their broader market perspective, tend to be more open to AI. Most of them (55%) support using AI in underwriting, with 21% undecided and 20% sceptical. They are also more positive about AI in claims, although to a lesser extent, with 40% welcoming its use, 33% concerned about decisions being removed from human oversight, and 22% undecided.
Younger advisers more sceptical
Advisers under 30 are notably cautious. Just 21% support AI for claims, with 45% expressing concern. Among advisers aged 30 to 50, 37% support AI in claims, while 31% have reservations.
This pattern carries over to underwriting. Among 30-to-50-year-olds, 49% are comfortable with AI, 44% of over-50s support its use, but only 38% of those under 30 agree.
AI adoption by advice firms
16% of principals say their firms currently use AI for suitability reports, with 28% exploring the option.
25% of firms are applying AI in administrative tasks.
21% of principals report using AI for web content, 20% for customer communications, and 19% for social media.
Only 8% are using AI for lead generation, though 32% are considering it.
Overall, 51% of principals are either using or exploring AI for customer communications.
Emma Thomson, chair of PDG, said, "We decided to produce a separate section of our report focusing on AI as we believe it will be a very important part of the future development of the protection sector. There is certainly appetite for AI to help speed up underwriting and claims processing times, particularly in the current climate where delays are causing issues for both customers and advisers."
"But the balance between technology and human interaction needs to be carefully managed. No one wants the AI saying 'No' to a claims payout with no human intervention. We believe there is a lot to discuss in terms of best practice and, importantly, meeting customer needs. Indeed, that extends to advisers’ increasing use of AI in communications but also in areas intrinsic to advice, such as suitability. We are looking forward to debating these issues in the coming months."
Roy McLoughlin, PDG board member, added, "It is fascinating to see that younger protection professionals are more sceptical of AI’s use than their older peers. Whether that reflects the stage of their career journey or simply more awareness of AI’s risks, it should give sector leaders at both providers and advisers pause for thought."
"It is important to bring everyone with you when technology is set to bring such significant changes. There is a lot of talk about AI and productivity improvements. It is also important that we don’t lose sight of our broader goals – improving the client experience and growing the market. If new technology can do this, then advisers should welcome it. But we have to get it right for our clients."
