Growth in the insurance sector driven by generative artificial intelligence (gen AI) has the potential to inject up to £59 billion to the UK annual Gross Domestic Product (GDP) by 2038, according to a recent report by Accenture.
According to the “Generating Growth: How Generative AI can power the UK’s reinvention” report, the banking, capital markets, and insurance sectors have the greatest potential to drive growth in the UK through gen AI.
By 2038, these three sectors alone could add up to £163 billion annually to the UK’s GDP. This represents almost a quarter of the total potential gain of £736 billion across all industries included in the report’s analysis.
It was revealed that the insurance sector’s potential for gen AI-driven expansion surpasses other financial services segments and is second only to the industrial sector, which could see an £80 billion uplift.
The report found that 71% of working hours within the insurance sector could be enabled by gen AI. This presents a considerably greater opportunity for transformation compared to other industries.
If implemented responsibly, this technology could unlock productivity gains of up to 30%, offering a great solution to the UK’s persistent productivity challenges, according to experts.
To date, financial services organisations have primarily deployed gen AI within their IT, customer service, and marketing departments. Despite its great potential, there is an “emerging deployment gap”, the report noted, which risks the industry failing to fully capitalise on these substantial potential gains.
While executives anticipate a continued rise in gen AI investment, this has yet to translate into deployment. Despite a significant 83% of financial services firms piloting AI, only 8% have successfully scaled these across key operational areas.
Regulatory uncertainty has been identified by executives as a major driver of this deployment gap, with 30% citing it as a primary barrier – nearly 10 percentage points higher than the average across other sectors.
This is despite the financial services industry’s relatively mature governance, risk, and compliance frameworks, analysts noted. Concerns surrounding data security were also highlighted as a top concern across all industries, with 33% of financial services executives concurring.
In order to close the deployment gap, the financial services sector would need to prioritise a significant shift in digital skills training, the report suggested. This training would be crucial to harness the potential of emerging technologies.
The research revealed that 67% of employees in the sector will require reskilling to effectively harness AI – the highest proportion of any industry.
To overcome these challenges, the report outlined a number of steps that financial services companies can take to unlock gen AI’s potential.
These include establishing strategic roadmaps prioritising AI use cases based on value and risk, building secure digital foundations to support AI ambitions, undertaking workforce transformation through tailored training programmes, and fostering innovation through dedicated AI teams.
As well as encouragingly, the research suggests that organisations acting on these imperatives significantly increase their chances of successfully scaling gen AI.
Carmina Lees, Insurance lead for Accenture in the UK, commented: “Generative AI presents a compelling opportunity to drive both efficiency and substantial growth within the UK insurance sector. However, organisations must strike a careful balance.
“While short-term cost optimisation is appealing, those who adopt a long-term perspective, focusing on how this technology can innovate their offerings and services, are poised to realise more significant gains and future growth opportunities. A people-centric approach will be paramount, requiring strategic investment in the skills and infrastructure needed to empower their workforce to understand and leverage these new tools.”
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