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Artificial Intelligence and the Insurance Industry: What You Need to Know

Posted by Parker Beauchamp on Jul 21, 2016

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Artificial Intelligence (AI) encompasses everything from machine learning to the Internet of Things (IoT). Thanks to these tech advancements, AI systems are now able to perform tasks that previously required human intelligence, such as visual and speech processing, decision-making and language translation.

From self-driving cars to automated assistants, AI is rapidly evolving and finding its way into surprising daily use cases, leading people to underestimate how it’s fundamentally transforming our world. It’s disrupting and improving organizations across all industries, and now it’s headed for insurance.

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

Automation

AI is providing endless opportunities in analytics, marketing and software development for innovative professionals who are able to leverage technology effectively. With AI, there will be a shift in the skills needed to work in the insurance industry. Tech savvy professionals must train for the future and learn to work alongside AI to reveal their true creative potential.

Insurance agents who once spent countless hours asking routine questions, submitting requests for insurance, filing paperwork and processing claims can now turn to sophisticated systems for accuracy, efficiency and effective execution of previously manual tasks. AI and machine learning can recognize patterns in vast amounts of data, reduce the time spent on menial work and augment insurance professionals’ capabilities.

For example, AI and automation allow insurers to cut down on claim processing and underwriting times significantly and reap sizable cost savings. Tasks that once took months to finish are now accurately completed in the matter of minutes, opening the gate for insurers to focus on more complex and creative projects. Machine learning can help insurers and agents underwrite risk more effectively, using the large troves of customer data it has collected.

In short, innovative insurers who put their trust in computers to have knowledge and abilities that humans don’t and embrace AI to complete narrow cognitive tasks will reap the reward of freeing up time to deliver higher-value work/services to clients.

Predictive Recommendations

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, as AI constantly collects data and helps identify consumer patterns to reduce risk.

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.

Forward-thinking insurers will leverage AI to streamline manual processes, cutting down on time and producing cost savings. Through automation, pattern spotting and machine learning, AI can assist agents in sorting through information and identifying cases that pose higher risk.

Unlike humans, AI systems share information globally in seconds. In turn, these systems constantly learn and adapt as more data is collected, thus eliminating the learning curve and contributing to the rapid growth and success of AI.

AI offers predictive recommendations that are backed by complex algorithms and data, and have the ability to analyze process flows for bottlenecks, improving overall company and customer satisfaction.

Advanced Applications

AI constantly works to better understand humans and their thought processes through machine learning, which allows AI to analyze human behavior and provide predictive consulting based on each individual’s wants and needs.

For the insurance industry, AI provides predictive consulting to provide better around the clock customer service. Whereas humans are unable to offer 24-hour support, AI systems like chat bots provide real-time feedback and insurance consulting to deliver quality service and improve the business’ bottom line.

With AI systems adopting more human capabilities, they could soon replace many functions of a typical independent agent. This technology can also improve internal processes and assist insurers in cutting down on time spent on mundane tasks, recommending new coverage for clients and finding solutions to improve on existing policies.

Executives must be willing to welcome AI with open arms to improve processes and deliver higher quality work. Assistance from AI tools will empower you to learn from and share knowledge with others.

With AI technology rapidly expanding, it’s critical that insurers keep up with industry trends to avoid becoming obsolete. Subscribe to our blog to stay in the loop on what’s happening in the insurance industry and how you can embrace new technology to improve processes and services.

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Topics: Insurance News & Trends