The Transformation Of Insurance Using Artificial Intelligence And Machine Learning
Most of us know that data has always been at the heart of the insurance industry. What has changed in our current reality to create massive disruption is the amount of data generated daily and the speed at which machines can process the info and uncover insights. We can no longer characterize the insurance industry as a sloth when it comes to innovation and technology. Artificial intelligence (AI) and machine learning are transforming the insurance industry in many ways.
Artificial Intelligence and Machine Learning Transforming the Insurance Industry
Although the concept and definition of artificial intelligence are still morphing as the technology matures, generally it is the idea of building machines that can think like humans. The term machine learning is used to describe the idea of teaching computers to learn in the same way humans do. It represents the leading edge of AI. Since insurance has always been data-heavy, it is perfectly poised to be significantly impacted by AI. Here are just a few ways the insurance industry is being transformed.
Insurance Advise and Customer Service
From the first interaction when determining what coverage is best to ongoing customer service, machines will continue to play an increasing role in customer service in the insurance industry. According to one survey, most customers don’t have an issue with interacting with a bot; most consumers would be happy to get computer-generated insurance advice.
Consumers have come to expect personalized solutions, and AI makes that possible by reviewing a customer profile and providing recommendations for only insurance products that are relevant for that customer and that would be the best for them based on set criteria. Chatbots that work with messaging apps are started to be used in the industry to resolve claims and answer simple questions.
Transaction and claims processing
As a highly regulated industry, the insurance industry processes thousands of claims and responds to thousands of customer queries. AI is being used to improve this process and move claims through the system from the initial report to communicating with the customer. In some cases, these claims do not require any human interaction at all. Those companies that have already begun to automate portions of their claims process are realizing the time savings and increased quality of service.
If the insurance industry could effectively mitigate fraud it would have a powerful impact on each company’s profit and loss statement. Using AI algorithms can identify likely fraudulent claims and highlight them for further investigation and action by humans if necessary. This allows an insurance company to take action much more swiftly than relying on humans alone.
Developing policies and prices while managing risk
The deluge of data an insurance company has at their disposal and the new ways they are soliciting it — Progressive’s in-car monitoring system that if installed gives the driver a discount on premiums while feeding the driving data to the algorithms or data from wearable devices that monitor activity levels and heart rate — can inform the type of policies individuals qualify for or recognize good behavior with discounts. By having a more complete picture of customers from a variety of sources, insurance companies can better manage risk and create products and services that serve their clients best.
Insurtech Transforming the Insurance Industry
Start-ups and tech innovators realize the potential applications for AI and machine learning in the insurance industry and the result is a boom in Insurtech, one of the fastest-growing segments in the Fintech space. There are many new services and products being developed by tech companies that will be operation changing for the day-to-day processes of insurance companies.
We here at Inmediate know that the insurance industry landscape will continue to evolve as the innovations of artificial intelligence and machine learning get better and create more solutions to streamline operations, create better underwriting models and provide enhanced customer service.