Generative AI is helping insurers shift from traditional digital transformation to AI-driven insurance. It goes beyond productivity gains and enables insurers to redesign core processes and create new revenue opportunities. GenAI improves decision-making across underwriting, claims, and customer engagement. This research explores key benefits, adoption challenges, and IDC’s view on how generative AI will shape digitally adept, ecosystem-enabled, and AI-native insurance models. 

How GenAI is driving the digital business transformation in insurance 

Insurance organizations worldwide are strengthening their digital foundations, and generative AI is emerging as the technology capable of unlocking the next level of growth. While automation and digital tools have helped modernize operations, GenAI delivers a step change enabling insurers to redesign processes, create new revenue streams, and solve longstanding industry challenges. 

Forward-thinking insurers are now starting to embrace generative AI, which promises far more than mere productivity gains. By resolving digital business challenges of all sorts, generative AI is poised to drive organic growth and create new revenue streams. This IDC Spotlight sponsored by Capgemini, provides the latest insights into this transformative technology. 

Breaking through the digital business road blocks with generative AI

As insurers transition into the digital business era, many still face structural barriers that limit their ability to fully capitalize on advanced technologies. IDC identifies challenges such as fragmented data environments, uneven digital literacy across teams, and operational models that were not designed for continuous innovation. Generative AI plays a pivotal role in overcoming these constraints by streamlining knowledge retrieval, enhancing content creation, and simplifying complex decision pathways across underwriting, claims, and customer engagement. 

Rather than functioning as yet another efficiency tool, GenAI acts as a value‑creation engine, breaking longstanding digital bottlenecks and enabling insurers to move toward higher‑maturity operating models. Its ability to interpret unstructured data, simulate future scenarios, and support real‑time decision‑making positions it as a catalyst for achieving digitally adept capabilities today and setting the foundation for ecosystem‑enabled and AI‑native models in the years ahead. 

Why insurers must evolve beyond productivity gains

IDC emphasizes that while many insurers recognize the promise of generative AI, a significant portion remains trapped in short term, productivity focused implementations. This “productivity trap” often emerges when organizations limit GenAI to task automation rather than leveraging it to fundamentally reimagine operations, products, and customer experiences. Insurers that hesitate to scale GenAI strategically risk missing opportunities to unlock new distribution models, real time risk services, and more adaptive pricing approaches that align with today’s evolving risk landscape. 

Breaking free from this mindset requires a shift toward long term digital business thinking where GenAI isn’t just a tool for speeding up existing workflows but a platform for enabling innovation at scale. By embracing this strategic lens, insurers can move confidently toward higher digital maturity and position themselves for sustainable growth in a rapidly shifting industry. 

What you’ll discover

  • Opportunities and challenges of generative AI adoption: Explore the benefits currently prioritized by insurers, and the concerns that make them approach this topic with caution.
  • How generative AI can accelerate insurance’s digital road map: See how IDC envisions the industry’s evolution post the digital transformation era: digitally adept, ecosystem-enabled, and AI-native insurance.
  • AI-driven insurance: Find out when – according to IDC’s forecast – AI will assume the central role of the insurance industry.
  • Partnering for bridging the great skills divide: Learn about the coming DevOps and data science skills gap, and how to solve it.

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FAQs 

Generative AI automates complex tasks, improves decision making, and speeds up digital processes across the insurance value chain. 

Insurers often use GenAI only for efficiency gains instead of tapping into its broader potential for innovation and new revenue opportunities. 

It enhances customer interactions, creates dynamic content, streamlines compliance tasks, and provides faster insights for pricing and risk assessment. 

GenAI helps insurers manage and organize large volumes of shared data, enabling faster knowledge retrieval and smoother collaboration with partners. 

AI becomes embedded in front and back-office functions, improving product design, underwriting, customer journeys, and claims handling. 

Common challenges include skill shortages, integration limitations, infrastructure demands, and managing large, complex datasets. 

Partnerships help insurers access specialized expertise, accelerate implementation, and close technology and talent gaps more effectively.