GenAI is transforming industries—including insurance, with many insurers having begun integrating generative AI into their core operations, enhancing operational efficiency, improving customer experiences, and driving innovation. It will continue to accelerate and fortify competitive advantage in numerous ways over the next five years.

Historically, insurers have succeeded at realizing incremental change, leveraging proven technology. While cumulatively valuable for customers and employees, incremental change only yields short-lived competitive advantage.

GenAI is opening the door for insurers to achieve step change and even game-changing differentiation. Initially, differentiation has been “behind the scenes” in employee-facing use cases. GenAI is proving that it can reduce operating costs and improve productivity, which frees up resources to focus more on value-adding activities and innovation. In addition, Celent anticipates that GenAI will help insurers accelerate to the cloud and modernize their data infrastructure, enabling them to become more data-driven and make faster, smarter decisions.

Eventually, as GenAI risks are mitigated and accuracy improves, it will drive powerful customer-facing use cases. Moreover, GenAI will enable insurers to develop completely new revenue sources. Insurers that embrace these advancements will be well positioned to lead the industry and meet the evolving needs of their customers.

GenAI Adoption is breaking into the late Majority Phase:

Positive sentiment is likely driven by strong performance improvement expectations. Over half of respondents (61%) have indicated increased productivity or improved efficiency as a positive performance impact.