The insurance industry is changing fast, driven by the rise of artificial intelligence (AI). Traditionally slow to adopt new technologies, many insurance companies are now looking to AI to boost efficiency and improve customer experiences. This shift was a hot topic at the Insurtech Insights Europe conference held in London this week.
Daniel Schreiber, the CEO of Lemonade, shared his thoughts during a keynote speech. He warned that many companies might struggle with AI adoption. “I think that many companies will absolutely fail at the AI test,” he said, comparing it to failed acquisitions where the fit just isn’t right.
Schreiber emphasized that adopting AI is not just about technology. It requires a change in company culture. If a company’s culture doesn’t align with the new AI tools, the implementation will likely fail. “AI, like people, needs to be trained. It needs feedback,” he explained. Companies must create a supportive environment for AI, similar to how they manage their employees.
He also pointed out that organizations need to be willing to “fire” AI if it’s not performing well. Just as companies have human resources teams to manage staff, they should have similar frameworks for AI. However, many leaders mistakenly think that managing AI is just the job of the IT department. This narrow view can hinder success.
Lemonade, which Schreiber co-founded in 2015, offers various insurance products, including renters and pet insurance, primarily in the U.S. and parts of Europe. The company has faced criticism for its AI practices, including claims that its AI system was denying claims to boost profits. In 2021, it was hit with a class action lawsuit over alleged mishandling of biometric data.
Despite these controversies, Schreiber believes that companies built around AI are better positioned for growth. They can scale and innovate more quickly than traditional firms. He acknowledged the longevity of established brands but warned that this shouldn’t be mistaken for invincibility. “A new revolution is afoot,” he said, suggesting that older companies may find themselves at a disadvantage in this new landscape.
As the industry evolves, the conversation around AI adoption continues. Companies must adapt not only their technologies but also their cultures to thrive in the future.