Gone are the days when insurance companies struggled to optimize the data they had. Today, insurers are using artificial intelligence (AI) and its many facets, like deep learning, machine learning, natural language processing (NLP), and robotic process automation
(RPA) for optimal data use that results in better growth, efficiency, and customer revenue.
We were collecting a lot more data, and it was coming to us at a much faster pace. One area where we were seeing a pain point was our time to insight, and we decided to use machine learning algorithms as a way to better understand the data so we could make predictions about what’s happening in the insurance marketplace. What was historically a bottleneck where we couldn’t entertain other lines of business, we can actually address their data science and predictive modeling needs now because we have a much faster throughput of our models and the business value we would be able to generate."
Pavan Divakarla, Data and Analytics Business Leader, Progressive
On the other hand, customers are also benefiting from AI-powered insurance services. For example, AI enables quick claims processing; efficient, customer query handling; comparative shopping; and 24/7/365 insurer availability.
Understanding AI Insurance
Like any other industry, the insurance sector is also counting on AI to facilitate sales, engage with customers in the best way, and streamline various operations. AI insurance allows companies to optimize the data they receive on a regular basis and eventually garner the necessary venture capital by simplifying various processes. These processes include the following:
Automating underwriting processes
Designing customized policies
Providing estimates with better accuracy
We have to acknowledge the fact that in contemporary times, AI insurance practices have made the process more reliable, secure, efficient, and accurate.
How are Insurers Implementing AI?
The most fundamental reason for using AI in insurance is to provide faster, better, and cheaper services to all. Several insurance companies are implementing AI to improve the customer experience and their bottom line. As a result, numerous start-ups that provide AI solutions for insurers are emerging. The following are some of the most interesting cases that show how leading insurance companies are implementing AI.
Automobile AI Insurance
China-based Alibaba Group’s Ant Financial, one of the giants of the auto insurance industry
, uses an AI-powered software, Din Sun Bao, for analyzing car damage and claims processing. Through machine vision, this software allows drivers to take pictures of their damaged car parts with a mobile camera. It compares the photos with its internal image database to analyze damage severity, estimate repair costs, and figure out the accident’s impact on future premiums.
Liberty Mutual, an American insurance company, uses its innovation incubator called Solaria Labs to offer better insurance products for all. This open API portal compares real-time public data with proprietary insurance data in order to deliver faster results.
Health AI Insurance
Around three years ago, Max Bupa partnered with an Indian tech start-up, GOQii Health. GOQii’s AI-powered ‘Wellness Engine’ and wearable devices track user data to provide real-time risk reports and healthy living advice to users.
Kirontech, a UK-based insurer, uses machine learning to detect fraud and underutilized health insurance services. Its efficient, machine learning, insurance strategies for medical claim analytics and fraud prevention have reportedly helped the company raise around $3.5 million through Series-A funding (data from crunchbase.com).
Benefits of AI Insurance
Given the data-rich nature of insurance companies, it’s a no-brainer that they must harness the power of data analytics
for the best outcomes. AI fulfills this need and eventually helps insurers stay ahead of the competition.
The following are the main AI insurance benefits that can drive the entire organizational operations forward:
Improved data access and data insights
Consistent employee performance
Better, faster, and data-centric decisions
Cost and time-saving
Reduced fraudulent claims
Improved accuracy in customer pricing
Enhanced customer experience
Insurance providers can now make dynamic projections about future outcomes with a continuously updated view of the underlying risk. And they can develop consumption-based pricing models that update in tandem."
Manan Sagar, Insurance CTO, Fujitsu EMEIA
Top Use Cases/Applications of AI in Insurance
The pandemic reinforced the importance of technology, especially AI and cloud computing
. The insurance industry gambled on AI for various reasons during this difficult phase, and it clearly paid off. The following are some of the top-used cases of AI in insurance:
For those who are aware, insurance claim processing is quite a complicated task. Customers apply for claims when they are in uncomfortable situations, and the insurer must ensure that they process those claims quickly and efficiently. AI and machine-learning-driven document capture software are of great help for handling enormous volumes of data needed for accurate claims processing and fraud prevention.
According to Finder data, approximately 29% of Americans admitted to lying to their insurers in order to obtain coverage. Such AI-driven tools can prevent these fraudulent activities through powerful predictive analytics of customer data.
Handling Customer Queries
Insurance companies are overloaded with customer support tasks that demand significant time, expense, and a huge in-house team of customer service executives. Companies can bypass these tasks by investing in conversational AI technologies like chatbots. According to UiPath and LarcAI (AI service providers), Hollard, a South Africa-based insurer, reduced transaction cost by 91 percent and achieved 98 percent automation through AI solutions.
Frequently Asked Questions
What is the role of AI in the future of the insurance industry?
With advancing innovations in big data and deep learning
, AI will keep transforming trends in the insurance industry. We will see more powerful algorithms, robots, and autonomous equipment redefining the entire insurance industry.
Advanced AI-driven bots, data analytics tools, and smart devices will replace conventional insurance agents and most of the claim processing tasks will be automated. In addition, there will be a significant reduction in road and home accidents thanks to real-time monitoring by new smart devices and (Internet of Things) IoT smart solutions.
How can companies accelerate AI insurance?
Insurers need to follow the given steps for accelerating AI insurance:
Use responsible AI toolkits to avoid the risks associated with AI
Be patient when developing AI skills within the organization
Integrate other technologies like automation and analytics with AI
Maintain the right, clean, and standardized data volumes
Which are the most popular AI insurance companies in the world?
The following are some of the biggest names in the global AI insurance industry: