Beyond the AI Hype: The True Focus of Digital Transformation

The rise of artificial intelligence (AI) in insurance has fueled excitement, but true digital transformation is much broader. Graham Harvey, CEO of Cardinal, argues that the real focus should be on rethinking processes strategically rather than simply plugging in AI tools.

"At the end of the day, it's not about AI. It's about digital transformation," Harvey explains. Insurers should start with core business challenges—fraud detection, claims automation, underwriting optimization—before deciding whether AI can enhance them. AI works best when applied to specific problems, such as automating claims data entry or fraud detection through big data analysis. However, not all AI implementations yield meaningful improvements, as many simply automate human decision-making rather than truly innovating.

Legacy insurance systems remain central to operations, handling financials, compliance, and policy administration. Many of these systems were not designed to integrate AI seamlessly, making collaboration with system providers essential. "You can't just rip out core processes and replace them with AI without system providers being part of the process," Harvey warns.

Beyond technology, insurers must address cybersecurity risks, regulatory compliance (POPIA, GDPR), and workforce reskilling. Leadership teams need the skills to guide transformation internally rather than relying on AI consultants who are still learning the industry.

True transformation requires a ground-up approach. "Rather than retrofitting AI, collapse processes, rethink them digitally, and integrate AI where it adds real value," Harvey advises.  

Key Points

• AI is just one tool—digital transformation is the real goal.

• Start with business needs (fraud prevention, claims automation), then consider if AI helps.

• Legacy systems are still essential, and AI must integrate with them.

• Collaboration with system providers is critical for successful AI adoption.

• Cybersecurity and data privacy challenges grow with digital transformation.

• Workforce reskilling is necessary—AI requires leadership and staff training.

• Beware of ‘AI experts’—many are just using pre-built cloud tools without true transformation expertise.

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