Unlocking AI & Data in Insurance: Key Challenges and FAQs

Published 27/02/25 under:

The insurance industry is evolving rapidly, and businesses that fail to modernise risk falling behind. From fragmented customer data to missed cross-selling opportunities, insurers, brokers, MGA’s, & Digital Eco-System providers face significant challenges that impact efficiency, customer experience, and profitability.

A recent Earnix Trends Report surveyed 400 insurance executives and highlighted key concerns:

• Modernising legacy systems
• Integrating AI into operations
• Improving efficiency
• Managing and integrating external data
• Enhancing fraud detection and prevention
• Keeping pace with competitors
• Delivering superior customer experiences

With customer expectations rising and competition increasing, digital transformation is no longer optional—it’s essential. But where should you start? Here’s how AI and data can unlock new opportunities and where Kerv Digital can help.

The Power of a Single Customer View

A fragmented view of customer data creates inefficiencies, missed sales opportunities, and disjointed customer experiences. The key to overcoming this is a Single Customer View (SCV)—a unified, real-time snapshot of each customer, integrating data from various sources.

With a SCV, businesses can:

• Provide seamless, personalised customer experiences
• Align marketing and sales communications
• Improve cross-selling and upselling effectiveness
• Make data-driven decisions that enhance profitability

Mapping the customer journey is also crucial. Whatever your role in the Insurance end to end value chain you must ask: What are customers thinking at each stage? What questions do they have? By aligning marketing content with the buyer journey, insurers can nurture leads more effectively and drive higher engagement.

Cross-Selling & Upselling: A Missed Opportunity

A recent Kerv Digital poll found that a high proportion of  businesses in the sector have a low product-to-customer ratio, typically in the 1.1–1.4 range. However, world-class businesses consistently achieve a ratio of 2 or higher—meaning they successfully cross-sell multiple products to each customer.

The key to improving this? Blended Digitisation. By leveraging AI and automation, businesses can elevate & personalise their approach to identifying customer needs, recommending relevant products, and personalising their offerings in real time.

AI & Data: The Game Changers

Many businesses in the sector are either experimenting with AI or feel stuck in a state of paralysis. But AI is only part of the equation—true transformation comes from combining AI with automation, data consolidation, and a robust digital ecosystem.

The Data That’s Being Left on the Table

Currently, businesses across the Insurance market only leverage 20% of their available data—the structured, easy-to-process information. The remaining 80% consists of unstructured data (videos, images, emails, social media posts, chat logs, and research documents), which often goes untapped.

Businesses that unlock & harness unstructured data gain a competitive edge by:

• Hyper Personalising their customer experience – taking personalisation & customer relevance to another level
• Extracting insights from large documents – Automating key information retrieval
• Improving claims processes – AI can detect fraud and anomalies
• Enhancing internal efficiency – Using AI-powered assistants (e.g., Microsoft Copilot) to support employees
• Automating financial operations – Matching invoices and resolving accounts

The Earnix Trends Report highlights AI’s increasing impact on business processes. While only 6-10% of executives recognised AI’s significance on their businesses in 2024, the proportion of businesses that feel that AI will have a significant impact on their business is projected to reach 25-28% in 2025. The most common AI applications in insurance include risk assessment, pricing, customer experience, claims management, & increasingly digital marketing.

Common AI & Data FAQs in the insurance sector

Q1: We have customer data in multiple systems—how can we use AI effectively?

A major challenge in insurance is data silos caused by disconnected legacy systems. Mergers and acquisitions often exacerbate this issue.

Kerv Digital implements cloud-based Data Platforms (e.g., Microsoft Fabric & Azure Synapse) to integrate data across sources. This creates a consolidated Single Customer View, enabling advanced analytics, automation, and AI-driven insights.

Q2: Do we need to replace our entire tech stack to implement AI?

Many insurers worry that adopting AI requires a full system overhaul, which can be costly and disruptive.

Rather than replacing everything, start with a Data Platform that extracts and consolidates data from existing systems. This allows AI and automation to deliver value without disrupting core operations. Over time, insurers can transition to modern solutions at their own pace.

Q3: Where do we start?

Knowing where to begin is a common hurdle for insurance firms embarking on digital transformation. To keep this brief, we have two high-level suggestions:

1. Consultancy – At Kerv Digital we use a highly focussed consultancy approach to prioritise needs, understand dependencies, ‘envision’ solutions and produce a roadmap. This usually takes only a handful of weeks and gets you to the start line of your programme, and/or helps form a business case for the next stage.
2. Proof of Concept (PoC) & Pilots – Start small. Rather than investing in a large-scale programme, a better approach can be to invest in one or two ‘Proof of Concept’ (POC) or Pilot projects. This could involve building a POC around a particular AI business case, or conducting a small-scale Pilot within a team (or subset of a team). Not only can this approach help to prove (or disprove) the usefulness of the tech, it is typically a huge learning experience and can also form an important part of your change management and user adoption strategy.

How to Build a Data-Driven Future

So to conclude, in order to succeed in the digital age, insurers must: ✔ Consolidate data for better decision-making ✔ Test AI with low-risk applications (e.g., internal use, automation pilots) ✔ Leverage advanced analytics for deeper insights ✔ Integrate AI into the customer journey to enhance engagement ✔ Prioritise data and technology in business strategy ✔ Adopt a people-first approach by training and supporting staff in new technologies

Balancing Innovation & Cost

Digital transformation requires investment, but it must be strategic. By building strong business cases and demonstrating ROI through early wins (e.g., AI-powered automation reducing manual workload), businesses can secure buy-in and funding for future innovations.

Kerv Digital: Your Partner in Insurance Sector Innovation

At Kerv Digital, we help businesses unlock the full potential of AI, automation, and data-driven decision-making. Whether you’re modernising legacy systems, integrating AI, or improving customer experiences, we’re here to guide you every step of the way.

Let’s start the conversation—how can we help your business thrive in the digital age? Get in touch with our experts.