Artificial intelligence is widely used in motor operations by insurers in Asia-Pacific countries, a Moody’s survey has found.  

The ratings agency questioned nine property and casualty insurers and 12 life insurers in China, Hong Kong, Japan, South Korea and Taiwan. It found nearly 75% use AI for motor insurance.

“This result provides a contrast with the common perception that traditional insurers are not very innovative and usually slow in adopting new technologies,” Moody’s said.

Motor insurance – which makes up about 40% of gross premium in the Asia-Pacific region – requires “substantial data from diverse sources, including vehicle types, vendors and driving behaviours. These rich data sets enable AI models to analyse patterns, assess risks with greater accuracy, and assist in fraud detection.”

Chinese insurers report more diversified benefits from AI than their regional peers, with most stating AI has helped innovate products and grow revenue.  

Ping An, the second-largest P&C insurer in China, uses AI throughout its motor operations, including content creation, pre-sale advisory, policy issuance and underwriting, and automated claims assessment and settlement. This has cut its operating expense ratio by about 1 percentage point.

More than 80% of respondents have reported gains in operational efficiency and customer experience through using AI. Marketing, sales and distribution is the top use case, and more than 60% use AI in customer service and claims management.

AI in product development and underwriting is less prevalent and Moody’s says this area “still necessitates the judgment and oversight of experienced actuaries”.

Not all customer service cannot be done by AI, either.  

“Human agents are still needed to explain the benefits and terms to the customers due to complexity of the products.

“Insurers will reap benefits from cost savings, but they would also need to continue to make investments to serve customers with human interaction.”

Find the survey report here.