Insurers and Banks Boost AI Budgets as Technology Becomes Central to Investment Strategy

Insurers Adopt AI to Enhance Investment Decisions

Artificial intelligence is becoming central to how insurers manage investments globally. A recent survey by Ortec Finance, involving professionals overseeing over US$10 trillion in assets, reveals that nearly half (45%) believe AI will be critical to investment strategy and asset allocation within five years. Another 48% consider it significantly important.

Almost all firms (99%) have integrated AI into their investment processes, with 91% starting more than a year ago. About one-third have been using AI for over two years, indicating a mature adoption phase.

Key Areas of AI Application

• Investment Evaluation: 60% of firms use AI to assess investments.
• Client Engagement: 62% apply AI tools to improve interactions with clients.
• Marketing: 55% leverage AI for marketing strategies.

Firms expect to increase their AI budgets significantly, with almost half forecasting a 75% or greater rise in AI-related spending in the next year. This builds on a recent 12-month period where 90% already reported increased investment in AI.

Where AI Adds the Most Value

The top areas where AI delivers benefits include:

• Investment evaluation (41%)
• Risk management (21%)
• Reducing operational costs (12%)

Other valuable uses include marketing, client engagement, underwriting, compliance, and reporting.

Insights from Canadian Banks

Another report highlights that Canadian banks have invested heavily in AI, primarily focusing on customer-facing tools. However, experts suggest the highest return comes from internal efficiencies—automating routine tasks and improving operations.

Andre Gagne, CEO of GFT Canada, emphasized the need for banks to prioritize operational excellence. He notes, “Customer-facing tools improve relationships, but true bottom-line gains come from optimizing daily processes.”

Executives and strategy leaders should consider these findings carefully. Increasing AI investment, especially in operational areas, can enhance decision-making and efficiency across financial institutions.

For those looking to deepen their understanding and practical skills in AI applications for finance, exploring targeted training programs can be a helpful next step. Relevant resources are available at Complete AI Training.