Why insurers need to become AI champions
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Anyone who thinks that the far-reaching changes caused by artificial intelligence(AI) will take decades is mistaken. The digital transformation is progressing explosively. For insurers, this means that the time for cautious experiments is over. If you don't seriously invest in AI now, you'll fall behind in a race where there's no second start.
In just one month, the (AI) world has changed dramatically: The U.S. has reinforced its technological leadership with the $500 billion Stargate initiative. The release of China’s large language model, Deepseek, has caused a stir in Silicon Valley and the financial markets. Meanwhile, the European Commission has responded with the €200 billion InvestAI initiative to promote European AI champions. Almost unnoticed, the EU AI Act has also come into effect.
The speed of these developments is unprecedented. Anyone still believing that AI-driven change will take decades is mistaken. The digital transformation will not follow a linear trajectory—it is progressing at an explosive rate. Those who do not act now are putting their competitiveness at risk.
The Insurance Industry Must Take Action
Mature AI models can process unstructured data:
Insurers primarily work with unstructured data (PDFs, scans, images, paper documents). Modern AI models can already analyze and extract meaningful insights from this data—a massive opportunity for the industry.
From experiments to production-ready solutions:
The true value of AI can only be realized in real-world applications. Companies that still consider copy-pasting into ChatGPT a "AI strategy" are missing the bigger picture. Insurers must establish powerful production environments and bring AI solutions into operation.
Leveraging AI Agents:
Scalable AI agents can be deployed to handle complex tasks. These agents plan their actions, take context into account, learn from mistakes, and proactively collaborate with humans. AI is evolving into a strategic assistant.
InvestAI – Europe’s answer to the AI race:
The €200 billion initiative is not just financially massive; it is explicitly designed for a rapid rollout. Companies that do not actively participate risk missing out on a historic opportunity.
A Wake-Up Call for the Insurance Industry: There’s No Second Chance!
Germany is the largest insurance market in the EU. The industry is facing perhaps its biggest transformation—and greatest opportunity—since reunification. AI agents are now mature enough to redefine business models. The insurance industry is uniquely positioned to benefit from AI—but it must act now.
Insurers should not just passively adopt AI but actively shape and drive its implementation to capitalize on the InvestAI initiative. This means not just launching pilot projects but fundamentally restructuring existing processes and systems. AI must be the top priority.
A benchmark for 2025: At least 20-30% of IT budgets should be allocated to AI implementation, with the goal of doubling productivity. Anything less would be inadequate.
The time for cautious experiments is over. Those who do not invest in AI now will fall behind in a race where there is no second start.
German Version: Warum Versicherer KI-Champions werden müssen
Original published version: Warum Versicherer KI-Champions werden müssen | Versicherungsmonitor