Why insurers need to become AI champions

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Anyone who believes that the profound changes brought about by artificial intelligence (AI) will take decades to unfold is mistaken. The digital transformation is advancing at an explosive pace. For insurers, this means that the time for cautious experimentation is over. Those who do not invest seriously in AI now will fall behind in a race where there is no second start.

Within a month, the (AI) world has changed fundamentally: The US has cemented its technological leadership with the $500 billion (€477 billion) Stargate initiative. The release of the Chinese large language model Deepseek caused a stir in Silicon Valley and on the capital markets. The European Commission countered with the InvestAI initiative, worth over €200 billion, to promote European AI champions. Almost as an aside, the EU AI Act came into force.

The pace of these developments is unprecedented. Anyone who still believes that the profound changes brought about by AI will take decades to unfold is mistaken. The digital transformation will not be linear—it is progressing explosively. Those who fail to act now are putting their competitiveness at risk.

The insurance industry must also take action:

Mature AI models tap into unstructured data: Insurers work primarily with unstructured data (PDFs, scans, images, paper files). Modern AI models can already evaluate this data semantically and in terms of content – a huge opportunity for the industry.

Production readiness instead of experiments: The true added value of AI can only be realized in productive use. Anyone who still sees copy-paste in ChatGPT as an “AI strategy” is not exploiting its potential. Companies need to create powerful production environments and go into production.

Use AI agents: Scalable AI agents make it possible to use AI specifically for complex tasks. They plan their approach, take context into account, learn from mistakes, and proactively cooperate with humans. This turns AI into a strategic assistant.

InvestAI – Europe's answer to the AI race: The €200 billion initiative is not only financially gigantic, but also explicitly geared toward rapid rollout. Companies that do not actively participate are missing out on a historic opportunity.

Wake-up call for the insurance industry: No second chance!

Germany is the largest insurance market in the EU. The industry is facing what is perhaps its greatest transformation (and opportunity) since reunification. AI agents are operationally mature enough to redefine business models. The insurance industry is predestined to benefit from AI – but it must act. The industry should position itself not only as a passive user, but as an active and demanding shaper in order to benefit from the InvestAI initiative.

This means not only launching pilot projects, but also beginning the radical restructuring of existing processes and structures now. AI must be the top priority. The benchmark for 2025 is that 20 to 30 percent of the IT budget should be allocated to the implementation of AI, with the goal of doubling productivity. Anything less than that would no longer be “satisfactory.”

The time for cautious experimentation is over. Those who do not invest seriously in AI now will fall behind in a race where there is no second start.

German Version: Warum Versicherer KI-Champions werden müssen
Read more: Warum Versicherer KI-Champions werden müssen

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