We previously talked about the benefits of data analytics in the insurance industry. One report found that big data vendors will generate over $2.4 billion from the insurance industry. However, major advances in AI have arguably affected the insurance industry even more.
AI has moved forward in giant leaps over the last ten years, and new developments are being realized every day. What makes AI such a popular tool for all industries is its ability to carry out jobs that even powerful computers have struggled to deal with in the past. Key benefits of AI include recognizing speech, identifying objects in an image, and analyzing natural or unstructured data forms.
Customers are becoming more accustomed to interacting with AI in their day to day lives, even if they don’t always realize it. They interact with AI features on their phone or when using a service, so their expectations are ever-increasing. These have been met by recent technological advances entering the mainstream. From cloud computing to vast computational muscle and global connections, systems can now cope with more complicated algorithms than ever before.
The insurance industry is evolving with new changes in AI. How is AI changing the future of insurance claims?
AI speeds up the gathering of insights
In terms of insurance, this allows us to deliver fast ‘as required’ provision to busy clients. AI has the potential to be a major gamechanger in insurance because the industry has to process vast amounts of data, which it is adept at managing. AI works to quickly give meaning to the kind of information that humans would take months to understand so that a company can access worthwhile insights in record time.
What will be the main changes to insurance claims?
Insurers are already using AI to select rates for customers and measure the risk they may pose, but how will it directly be of use in claims processing? The main difference will be in faster resolutions. Companies and individuals experiencing a problem want to move on as soon as possible. That’s why they plan for the future with secure protection such as the general liability policy from Next Insurance. That policy provides a company with cover for the type of accidents which often happen in the workplace. It’s one of the most popular policies for small businesses and self-employed people who want protection against claims and slander accusations. The faster a claimant receives the assistance they need, the sooner they can begin to rebuild. It’s the speed at which a claim is settled that influences their opinion of a provider, so AI can also help keep a company’s reputation intact in the long-term.
Processing individual claims
For every claim submitted, numerous tasks have to be completed. These could include reviews, adjustments, and investigations where necessary. Finally, a denial or a payment is issued. AI could streamline various aspects of this process, wiping out human error, unifying data presentation, and keeping up with changing regulations.
Capturing data from documents
As AI can recognize written text using document capture technology, it’s far easier for insurers to swiftly manage high volumes of claim forms. We know that people are often stressed and keen to reach a solution quickly when submitting a claim. By carrying out fraud checks, processing the documents, and checking to confirm a claim meets regulations in minutes, businesses can provide their clients with what they want faster.
Estimation of vehicle repair costs
Automobile claims will be speeded up hugely when companies use an AI system to recognize the damage caused in an accident. The same software will then scan auto repair shops close to the claimant and immediately estimate the cost.
Spotting fraudulent cases
Decreasing fraud is in the interests of insurers and their clients. Billions of dollars in fraudulent claims are made each year, and one of the most common is identity theft. This means businesses have to carefully check each case, ensuring that criminals are not attempting to claim without the policyholder’s consent. AI automates and accelerates the process of fraud detection in the field of identity and financial transactions.
Dealing with complex appeals
Sometimes a claim is rejected or not paid out in full. This can result in appeals that may drag on for months. It’s not what insurers or clients want, but these lengthy processes may soon become a thing of the past. Accurate processing of appeals through AI and automation software is currently being used by companies. It involves identifying crucial information from documents and extracting it right away, so the customer’s journey is smoother and shorter.
More accurate policy pricing
At present, insurers use AI to assess individuals’ risk using quite generalized metrics, often based on their age, location, and gender. In the future, more advanced AI can make far more detailed risk profiles taking into account biometrics, past claims data, and even lab testing. Without the need for manual business operations, quotes are generated swiftly and at minimal cost to the insurer. Moreover, some clients may have their premiums reduced.
How seriously are insurers taking AI right now?
AI could undoubtedly become a game-changer at some point, but are modern or traditional companies seriously considering it? Judging by the level of investment being made, insurers are preparing themselves for an AI-based system. According to the AI 360 report, released by the professional services firm Genpact, more than $5m is being invested annually by 87% of insurers. That is more than retailers and the banking industry. The insurance industry is especially suited to AI because it deals with enormous amounts of big data. This is significant because each piece of data input into a system supports the deep learning of AI and the generation of insights. With lots of the right data, input by experts in business data analytics, AI can produce ever smarter predictions.
Are we close to AI reliance?
As yet, insurance companies have just started to dip into the potential of AI and how they can harness it to the benefit of their client base. AI will inevitably perform critical functions in the industry in the future, but further development is needed to make this a reality. Even when the software has proven to be up to the task, insurers will still need to consider privacy questions and the incorporation of AI into their existing claims infrastructure. So, although AI does offer plenty of exciting possibilities, at present, realizing them is not straightforward.