Almost half of Nationwide’s 22,000 employees are using Microsoft Copilot and other artificial intelligence tools every day. The insurer’s wants that number to hit 90% by 2026.
To make this lofty target a reality, the property and casualty insurance company on Wednesday announced it would invest $1.5 billion through 2028 to support technology innovation initiatives, including $100 million that will be earmarked to advance AI each year for the next three years.
The AI spending will go toward creating and managing AI assistants that will take on more work tasks, training and education, software development, and the underlying infrastructure to ensure that the AI systems that Nationwide relies on are resilient and secure.
Jim Fowler, Nationwide’s chief technology officer, says that the new financial commitment represents a 20% increase from what the company has been spending on an annual basis “in the last couple of years.” Since 2015, Nationwide says that it has invested $5 billion in technology modernization.
It is also indicative of a strategic pivot of Nationwide’s AI Playbook. Four months ago, Fowler says the company’s leadership met and wasn’t pleased to see dozens of AI use cases had proliferated across the organization. While workers were getting more efficient, it wasn’t always clear how they should use their extra time. Ten of Nationwide’s C-suite leaders worked collaboratively to identify 18 flagship AI use cases to prioritize across the business.
“We stepped back and we said, ‘We’ve got to get out of experimentation mode,’” says Fowler.
A few of the flagship AI use cases that Nationwide will be focusing on include a tool that will automate 80% of pets claims, including the resolution of 25% of those claims with an instant settlement. Fowler says this application of AI will create more capacity for the operations team to hunt down new business. For the farm and agricultural insurance business, AI tools are expected to reduce the review time for those claims by 20%.
In recent months, CTOs and chief information officers have pivoted their investment strategies to focus on fewer bets tied to bigger business outcomes. This new approach could help them finally achieve a steadier return on their AI investments, which has proven to be difficult to achieve as enterprises near the three-year mark since the debut of ChatGPT.
“Part of what we’re doing differently, that I see other companies doing, is we’re setting targets that are the ROI,” says Fowler. “And those targets are big enough that even if we don’t get to the full target, we will still be wildly happy with the outcome.”
That includes an efficiency target for Fowler’s own software employees. His goal is to use more AI coding assistant tools to cut the cycle time to write new software by 50%. “I’ve got no shortage in the backlog of demand for technology,” says Fowler, especially given this week’s big new IT investment.
Nationwide, which ranks 72 on the Fortune 500, says it has already scaled six AI initiatives. Those tools include a generative AI claims assistant that can summarize the log notes of complex customer claims. When a claims representative gets in touch with a customer to discuss a large reported loss, it gets a one-paragraph summary to bring them up to speed on the case.
An AI-enabled tool is also being used by developers to help migrate legacy code to new platforms. Fowler says that this tool has driven a 50% reduction in code conversion time for Nationwide’s development teams. That solution was developed during one of Nationwide’s hackathon events.
Already, AI chatbots and other productivity tools have been embraced by some early AI adopters. Nationwide says it has identified around 1,000 employees who had made themselves more productive using AI. While the company wants to continue to encourage that usage, Nationwide also wants to focus more energy and dollars on the flagship ideas.
“What we saw is that with all the experimentation that was going on over the last two-and-a-half years, nothing was scaling,” says Fowler. “I don’t want to take away from the associates the ability to kind of drive their own local productivity, but I want to be more intentional about where we’re going to get scale for bigger solutions.”
Next week, Fowler says that Nationwide will host a symposium for roughly 1,000 employees who have an associate vice president title or above. The company will tap the expertise of both internal and external speakers to talk through expectations for how technology, including AI, will improve operations and the future strategy for every business unit.
These bigger bets on AI from have raised questions about the future of work and surveys have shown workers are worried that they’ll be displaced by the technology. Just this week, Amazon announced it will cut about 14,000 jobs as it accelerates spending on AI.
But AI may not necessarily be a job killer at Nationwide. Fowler says that the company’s sales have grown 50% over the last five years and “we’re really not expecting that to slow down.” His hope is that AI and other innovative technologies will make it easier to generate more business.
“This isn’t just an efficiency play,” explains Fowler. “AI is not just about productivity.”
John Kell
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This story was originally featured on Fortune.com