Artificial Intelligence and the future of the insurance industry

With automation already affecting the insurance industry in the areas of underwriting, claims and broking, big changes to the industry are certainly imminent. Some sources have placed the number of Australian jobs with a moderate to high likelihood of being eliminated by automation within the next 10 to 15 years as more than 5 million.

Is yours going to be one of them?

Artificial Intelligence (commonly known as ai) encompasses everything from machine learning, automation, chatbots, predictive recommendations and algorithms. Thanks to these tech advancements, ai systems are now able to perform tasks that previously required human intelligence – things like visual and speech processing, decision-making and language translation.

Artificial intelligence is starting to be applied in efforts to improve the current claims processes used within the insurance industry.

Claims processing and management are currently handled by a range of employees including claims administrators, case managers, payments officers, technical officers and so on. However, with the advancements in modern technology, new processes are being developed in which claim reporting, information gathering, auditing and communication with the customer can now be done, and done more efficiently, using ai.

The potential here is huge, as the process could allow clients the chance to file claims without having to fill out copious amounts of paperwork and spend hours on hold or playing phone tag with their insurance company.

The benefits include a significant reduction in processing times and quality but theres .also the potential for ai to be used in the detection of fraudulent claims.

Instead of relying on humans to manually comb through reports to catch inaccurate claims, ai algorithms can identify patterns in the data and recognize when something is fraudulent.

Below, we’ve rounded up ai applications with the greatest potential to impact the insurance industry.

Automation

As previously mentioned ai and more specifically automation is being used to improve efficiencies in claims processing and management. Claims employees who once spent their days asking routine questions, filing paperwork and processing claims can now turn to automated process and machine learning that recognize patterns in large amounts of customer data.

Predictive Recommendations

Have you ever been online shopping only to find that weeks after, the same or similar products and brands are appearing on your newsfeed and advertisements? Thanks to companies like Amazon and Google, consumers are now accustomed to algorithms and the use of historical behavioral data to offer sales, search and product recommendations in their day-to-day lives.

This same concept can apply to insurance. If utilized, ai can build predictive models for expense management, high value losses, reserving, settlement, litigation and fraudulent claims by using complex algorithms. These algorithms compare answers and information provided by customers to make appropriate recommendations for each risk scenario.

Advanced Applications

For the insurance industry, ai can provide predictive consulting to provide better around the clock customer service. Whereas humans are unable to offer 24-hour support, AI systems like chat bots can process concerns that are either typed or spoken from customers and provide personalized service. We are already seeing insurance companies use chatbots to answer basic questions and resolve claims, as well as sell products, address leads, or make sure customers are properly covered by their insurance, which is particularly useful outside of standard business hours.

Data

Insurance is driven by data. Telematics, or wireless communication is dramatically changing the auto insurance industry by enabling new product offerings, improving underwriting and offering incentive for driver safety. This enables a far more complete understanding of vehicle usage which can provide many benefits; not only to the vehicle owner but also to other road users. Telematics allow the tracking, monitoring and management of all important data so should a driver be in a serious accident, there is potential for this data to alert emergency services or, in the case of a breakdown, the car diagnosis could be sent to breakdown services. Insurance companies are already offering discounts to customers who transmit their driving data back to the company.

The insurance industry has not always been viewed as ‘early adopters’ of new technologies however the combination of a new way of thinking and the development of artificial intelligence has great potential to completely transform customer experience within the insurance industry and we’re looking forward to seeing how it is adopted across broking, underwriting and claims.