Artificial intelligence has the potential to lower internal and member costs for insurers while also increasing profits, but the industry has largely not embraced these opportunities, according to a June 5 analysis from McKinsey.
"Incremental approaches will continue to yield only minor savings, as we have seen to date across most of the industry," the analysts wrote. "To capture full value, payers must reimagine the end-to-end processes of each domain."
Three key takeaways:
1. If payers fully implemented already available generative AI and automation technologies, on average they could save 13-25% on administrative costs, 5-11% on medical costs and increase revenues by 3-12%.
2. Marketing and sales, utilization management, and IT are the divisions with the largest potential opportunities when using AI.
3. Payers that want to better use AI technology should have these six key things: a strategic plan, the right talent, a conducive operating model, technological capabilities, consumable data and the ability to ensure adoption and scale.
"In general, most payers are ill-equipped to pursue this opportunity," the analysts wrote. "To do so, they have to close the gap that exists between their current capabilities and those needed to fully address the six areas outlined above."