ChatGPT and Other Large Language Models: P&C Insurance Edition
What to Do Next
The debut of ChatGPT, a product of the joint venture between OpenAI and Microsoft in November 2022, has catalyzed a comprehensive examination of the impact of large language models (LLMs) on the insurance industry. The strategic question for insurers is twofold: what is the potential influence of LLMs, and how can they be seamlessly integrated into their operations? Augmented intelligence tools such as ChatGPT and other LLMs combine artificial intelligence (AI) with human intelligence, enhancing and amplifying human abilities, ranging from generating content quickly to improving decision-making, problem-solving, and overall cognitive capacities.
Of particular interest is the user-friendly interface of LLMs, which allows for the convenient accessibility of these tools for anyone with internet access. LLMs are capable of transforming many tasks currently undertaken by human employees and adding value to these tasks in various ways. As a result, insurers must consider the genuine value provided by their human employees and adjust their talent requirements accordingly. Depending on the cost efficiency, LLMs could be accessed by any enterprise through an API, thereby leveling the playing field.
The failure to embrace LLMs could have significant ramifications for insurers in the long term, as early adopters may establish a competitive advantage that is sustainable over time. As consumers lead the way in adopting LLMs, they will expect their service requirements across industries to increase, necessitating the adoption of LLM solutions by insurers at some point. The absence of such solutions may leave organizations less operationally efficient than their peers, leading to long-term difficulties and reduced profitability. Navigating the uncharted waters of augmented intelligence demands extensive collaboration between insurers, enterprise stakeholders, and regulators.