While consumers are open to the use of artificial intelligence (AI) from property & casualty insurers for real-time alerts about weather-related risks, they express concerns about the accuracy of AI predictions and their potential impact on premiums and coverage, according to a recent survey by Insurity.
The report, which surveyed over 1,000 adults across the United States, found that 45% of consumers are comfortable with their insurer using AI to monitor and provide real-time alerts about potential weather-related risks. However, 42% expressed concern about how the accuracy of those predictions could influence their premiums or coverage.
Despite these concerns, the report identified opportunities for insurers to build trust. While 26% of consumers say they are more likely to trust AI-generated early warnings compared to traditional forecasts, only 20% consider it important that their insurer use AI to predict and mitigate severe weather risks.
“Consumers want the benefits of AI-driven weather insights, but they’re understandably cautious about how these predictions may affect their policies,” said Chris Lafond, CEO of Insurity. “For insurers, the year ahead presents an opportunity to build trust by prioritizing transparency and accuracy while demonstrating how AI can proactively protect customers without introducing unnecessary costs.”
The report underscores the opportunity for insurers to elevate the customer experience through AI. Real-time alerts and proactive monitoring can strengthen customer relationships and potentially reduce claims costs by enabling early action, the report stated. However, insurers must ensure their AI-driven insights are not only accurate but also easy for policyholders to understand and trust.
“As the insurance industry navigates this landscape, the insurers that address these concerns head-on will be better positioned to foster stronger policyholder relationships and remain competitive,” added Lafond.
Information about the Insurity survey is available here.