The insurance industry has been investing in artificial intelligence (AI) for some time. In fact, AI in insurance could be considered relatively mature, at least at a basic level. Features like chatbots and AI-driven analytics are well established in the field. But with each passing year, the level of sophistication of AI-based insurance continues to increase.
The need for AI in insurance is clear. Consider all the homes, cars, and businesses in a country. Now factor in appliances, computers, equipment, and other items that are often insured. The number of insured items and items is astronomical. It is not possible for a team of agents, clerks, assessors and fitters to manually stay on top of everything. Automation is needed, along with the ability to sift through all the associated data to make decisions, spot trends, and highlight sales opportunities.
AI in insurance today
AI is impacting the insurance industry in several ways. It is operated in areas such as complaints handling, underwriting, fraud detection and customer service, to name a few. But this is a market where AI spending is expected to skyrocket.
After all, insurers are already sitting on wealth. Over the decades, they’ve accumulated mountains of data on families, homes, and businesses. However, it is often isolated and inaccessible to frontline people. AI can change this if the information is integrated and available for analysis. It can pull together this abundance of unstructured data and leverage it to increase customer engagement, improve service personalization, and make marketing messages more meaningful.
According to a PwC survey, a a quarter of insurance companies report widespread adoption of AI, up from 18% last year. An additional 54% have started implementing AI and are looking to grow. An earlier LexisNexis article, “Balgie or Reality: The State of Artificial Intelligence and Machine Learning in the Insurance Industry,” revealed that 16 of the top 20 insurance companies were strong followers of AI and machine learning (ML). The percentage fell to 62% for ranks 21-50 and to 51% for the rest of the top 100.
5 key applications of AI in insurance
1. Improved customer experience
Matt Adams, a New York-based PwC partner, said creating a better customer experience (CX) is the biggest area of insurance AI success.
“Companies are increasingly using AI to personalize products for consumers and business customers, create more continuous interaction with customers for greater loyalty and upselling, and analyze more data from more sources (including social media) for better predictions, ”Adams said.
the National Association of Insurance Commissioners (NAIC) notes that many insurers have already invested in virtual assistants such as chatbots. These chatbots offer digital services and can have natural conversations with human beings.
The goal is to answer questions, route calls, minimize human traffic to top-level requests only, and be available 24/7 for advice, billing information and inquiries. and current transactions. Insurers such as Geico, Allstate and Lincoln Financial were among the pioneers of chatbots in the insurance industry. And today most large companies use them.
Chatbots are also now used to deal with cybersecurity password issues and provide copies of policies and other basic documents. This saves a lot of manpower.
3. Claims management
A startup known as Lemonade has combined machine learning with chatbot technology at different stages of the complaints process. ML models assess the severity of damage; forecast repair costs based on historical data, sensors and images; and settle basic claims. Lemonade boasts that its chatbots, Jim and Maya, can guarantee consumers a policy in as little as 90 seconds and settle a claim in three minutes.
4. Agent interaction
Liberty Mutual has developed a way for its AI applications to connect to Amazon Alexa to support a wide range of functions. This includes answering user questions, quickly providing insurance quotes, and connecting users with the closest agent who can meet their needs. The company also uses this AI technology to offer advice on risk management.
5. Insurance on demand
Consumers these days want instant service. They no longer want to call a 1-800 number, be referred to a local agent, make an appointment, drive to see the agent, wait for the papers to be prepared, then sign all the paperwork. Instead, they want to do it online or on their smartphones.
Insurance company Trov, for example, offers an app that can be approved by insurers and that simplifies many aspects of insurance administration. Consumers can turn coverage on or off with a swipe of their phone, and chatbots are built in to automate claims handling. Trov has partnered with companies like Slice Labs to provide on-demand insurance coverage to homeowners, renters, and small business owners.
Likewise, Bind Benefits allows consumers to customize health insurance coverage according to current needs or life events. Bind partners with United Healthcare as part of its service model.