In Q2 2017, AIG’s Valic, its digital services unit reached US$99.2bn from US$95.2bn in assets under management at the start of the year. Although AIG has invested plenty of time and money creating digital services at Valic, it is now seeking new ways to use AI, data/analytics and the computational algorithms behind robo-advising platforms to cater to specific clients in the individual retirement business. Valic has 1,000+ financial advisers and recently joined up with startup firm RetireUp to use new software in March.
According to research by Aite Group, the digital advice market will reach US$1tn by 2020 and under Brian Duperreault, AIG’s current CEO, the group is embracing technology on all fronts to streamline operations and forge relationships with multiple online wealth management platforms.
AIG has said of the renewed focus on wealth management platforms: “An important part of our strategy is to make sure that we’re at the leading edge of how to work with those organizations. Robo advisors are a re-affirmation of how big the retirement opportunity is in the US”
Ultimately, the proliferation of AI-based services from chatbots to customer authentication and now financial planning robo services represents a paradigm shift for industry incumbents such as AIG. In the face of such disruption, the aggressive investment into robo-advisory by AIG is a signal of their belief and commitment to self-disruption i.e the ability to renew one’s own capabilities before new entrants gain traction.
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