Ways On How Artificial Intelligence Is Changing The Insurance Landscape
The term ‘Artificial Intelligence’ or AI has been in vogue for quite some time. We have usually seen the use of AI in science fiction movies, and the effects are intimidating. Artificial Intelligence continues to be a hot topic, and with the advancement of technology, AI is improving every day and has entered our lives.
Talking about the insurance sector, most insurance policies, including term insurance plans globally, continue to record relatively modest numbers since some of the market segments are largely under-penetrated. But the scenario is gradually changing as people are becoming aware of the importance of insurance in their everyday living.
As companies jostle to increase their market share, one of the key determinants for prospective clients making up their minds is the claim- settlement ratio. But settling claims is not as easy as one may imagine; the main reason being insurance companies have to process thousands of claim requests every day, depending on the size of their customer base.
Detecting dubious claims
While companies would like to clear most cases within the least possible time, some due diligence is required in each case to weed out dubious claims. In almost all cases, a certain amount of manual verification of claim documents and other data is inevitable. All of this increases insurance firms’ operational costs even as there is some delay, which annoys customers.
Consequently, it is in the interests of both insurance companies and claimants that the claims are settled at the earliest. Thanks to technology such as AI, data analytics, and other allied tools, the end-to-end claims process has been streamlined and speeded up. Beginning with data capture, settlement initiation, approval and authorization, tracking of payment and recovery, and the processing of legal issues to managing communication, AI and other tech tools have drastically reduced the turnaround time.
For instance, today, bots are deployed in reviewing claims, verifying policy details, checking for fraud, and overseeing the payments process. As a result, the entire claims process becomes much faster and more efficient. This benefits both customers and insurers.
Under the earlier traditional model of claims processing, insurance companies found it problematic to speed up the process because of the sheer volumes of daily claims. It’s challenging to decipher specific patterns within the claims data that might require closer scrutiny through human supervision. But with AI, it is only a matter of minutes and deft programming for digital tools to pick up specific claim patterns occurring randomly or at scale. What’s more, all this is done without unduly inflating operational costs or consuming extra time.
In managing the above, insurance players need to work with AI specialists in integrating tech tools such as ML (machine learning), NLP (natural language processing), and robotic process automation. Through these specialists, compatibility can be maintained between digital tools and a company’s existing legacy systems.
Advantage of data analytics
Towards this objective, insurers need to have robust IT and analytics capabilities, which contribute immensely to improving the processing of claims. Insurers typically deal with tremendous volumes of data. Therefore, the twin capabilities comprise the proper type of data science resources programmed to glean informative insights that will be actionable and help prevent fraudulent claims.
Through strong IT and analytics systems, insurance companies can automate the detection of claims fraud. For example, NLP software could help in pinpointing patterns arising in past fraudulent claim applications. The moment these patterns are detected in new applications, the system instantly raises red flags. As is evident, AI deploys a systematic approach in detecting such anomalies.
Without a doubt, predictive analytics can help insurance entities discover fraudulent claims much faster and with vastly higher accuracy rates than humans could ever achieve. Indeed, such automatic AI-based claims detection software could help insurance companies identify frauds in real-time even as a prospective claimant may be interacting with their team or filing a claim online.
Today, these technologies are transforming claims management, benefiting both honest claimants and insurers. For the former, AI ensures their claims are processed and cleared with faster turnaround times not possible earlier.
Considering the benefits, it is in the interest of prospective customers to opt for professional insurance companies, which deploy digital technology in clearing claims much faster than traditional entities. The tech-savvy companies are also better positioned to guide potential customers about bespoke policies, including term insurance, which suit individual requirements.
Undoubtedly, as AI-enabled claims settlement becomes popular, customer satisfaction rates are set to touch new highs.
Inmediate is an insurtech startup from Singapore that is using the latest technology such as Artificial intelligence, Distributed Ledger, and NLP, making insurance processing and underwriting fast, cheap, and flexible. That gives for better processes, lower costs, improved time to market, and new revenue opportunities.