General Insurance Article - Insurers adopting AI more for growth and profitability

 Key highlights include the following:
 Investments in AI will continue to grow as they hold a lot of potential for insurance companies' growth and profitability.

 AI provides potential benefits to insurers across the value chain by enhancing operational efficiency, the customer experience, as well as providing support in core functions like underwriting and claims management.

 AI adoption also introduces new risks that, if not managed properly, could cause significant financial as well as reputational damage with negative credit rating implications.

 "Ultimately, companies need to invest in AI to stay competitive; however, at the same time, they must not lose sight of the importance of having commensurate risk management frameworks," said Nadja Dreff, Senior Vice President and Sector Lead, Global Insurance & Pension Ratings at Morningstar DBRS.

 "From a credit rating perspective, AI can both enhance and damage franchise strength by affecting customer experience. And, while it may improve profitability through efficiency gains, it generally also contributes to higher operational risks, including legal and compliance risk."

 Morningstar DBRS Commentary On Insurance Companies Increasingly Look to AI for Growth and Profitablity