How AI is Used in the Insurance Industry: Insurance AI Trends to Watch
April 14, 2022
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Imagine automating up to 25% of business processes, and allowing human teams to shift to deeper problem-solving and customer relations tasks. Then picture reducing the operational cost to insurers by up to 20% through that automation and digitization strategy alone. Imagine reducing inbound phone calls by more than 30%, simply by providing customers with proactive status updates.
With artificial intelligence capabilities, insurance companies and the insurance sector can step fully into the world of digital transformation, making these improvements (and so much more) a reality. Let’s explore how AI technology is changing the insurance world to make it faster, more efficient, and even better for customers, and carrier employees.
Data science is bringing new innovations to the very traditional world of insurance and that's good news for customers, employees, and insurance executives alike. Here are our favorite things coming true thanks to this new tech.
AI will soon have even more data sources to process, thanks to new sensors in IoT and their expanded use in insurance products. Sensors have already caused considerable waves in industries like manufacturing and agriculture, and help insurance companies handle critical aspects of the insurance process.
For example, auto carriers are using data from devices in vehicles to track driving data or assess damage after an accident. Health companies leverage data from fitness trackers to offer health rewards based on activity metrics and predictive analytics. Sensors in homes and buildings can trigger warnings to avert a catastrophic loss. With the right processing support, insurance companies are leveraging data to deeply understand user needs and bring state-of-the-art data analysis to better understand the consequences of human interaction.
As advances in robotics inch us towards autonomous vehicles and devices, insurance companies need to adjust how risk assessment plays out. For example, they may need new methods for assessing risk and property damage in 3D printed buildings to add to traditional assessment tools for standard builds. Evaluating liability in a car accident may include reviewing black box data.
On the other side, robotics could also provide the ability to offer frictionless assessments. Take robotics capabilities in medical care--while insurance companies will need new processes for insuring hospitals using robotic surgeries in addition to traditional surgeons, healthcare may also present less risk (for organizational and individual risk) by using robotic assistants to monitor chronic illness in consumers 24/7.
AI is taking on human-like processing thanks to advances in cognition. For example, neural networks are models inspired by the structure of the human brain. Deep learning —traditionally implemented by leveraging neural networks— allows insurance companies to process billions of data points from IoT, customer interactions, robotics, and even other unstructured data sources.
In the past, the data that AI now can process without difficulty was too complex to train models to evaluate. Now there are models trained to evaluate images pixel by pixel or syllable by syllable. Natural language processing, computer vision, and image classification are becoming more economical to use in production by the day and don’t rely on human beings.
Even better, the prevalence of new technologies will make it easier for companies to adopt and customize new solutions like individually tailored insurance coverage. The insurance industry may be able to create new types of protocols to manage security or develop new use cases. Thanks to existing solutions, it can more easily train machine learning models or build better automation strategies.
These are trends are not mainstream across all carriers, but AI is currently impacting insurance through fraud detection, better customer response, and real-time automation. For example, one insurance company used a virtual assistant to automate claims processing and reduce process duration from three weeks to one hour. In addition, Tower Insurance used artificial intelligence products to completely reinvent their customer experience despite being a company started during Queen Victoria’s reign.
The most critical component for making these and other use cases a reality today is a solution that offers quick deployment with no coding or technical expertise required to create automated 2-way conversations. For example, an intelligent automation platform already trained on insurance-specific conversational data delivers a solution that insurance companies can deploy right away.
And instead of replacing customer service representatives, underwriters, or claims adjusters, they offer support and consequently can improve response times and automate typical inbound and outbound requests. AI ensures employee availability to customers with more complex service needs and more time-intensive claims processes.
Thanks to no code options and ease of machine learning deployment, insurance companies don’t need their own trained data scientists or team of developers. Insurance companies can reap the full benefits of things like omnichannel conversation automation, email triaging and document processing for:
These tools are designed to satisfy the customer satisfaction initiatives across all groups in the insurance sector as insurers fight for market share.
The best first step after finding the right tooling, is using claims data or customer data (sometimes gathered and stored over decades) to try and distill useful information. Insurers stand to benefit from evaluating that information to better their underwriting processes, insurance policies, and gaps in customer communications.
AI is the future of insurance, and intelligent automation will soon shift from being a key differentiator to enabling experiences that customers expect all the time from their insurance carriers and health plans. It may feel like early days for insurers and as if AI is only usable in marketing efforts, but that is not the case. Companies are already reducing friction and improving customer experience without expanding their technology departments. They’re enjoying the benefits of virtual assistants, addressing fraudulent claims, gaining real-time insight, and responding to the very competitive insurance market.
It’s time to discover how artificial intelligence can drive value for companies in the insurance space, their customers, and for their own employees.
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