Artificial Intelligence (AI) driven fast track services, digitalized platforms, online facilities, and internet proliferation summarize the first quarter of the millennium. Insurance provides US citizens safeguards for health, home, auto, and education. How can AI help the insurance industry provide economical, speedy, and defined services?
US Insurance Industry
The insurance industry of the United States, generating Premiums above one trillion US dollars, is not only among leaders of industry around the globe but is also a key contributor to the American economy, hedging risks and covering the costs of accidents. The services do not only include traditional life and health insurance, property and casualty insurance, business and commercial insurance, and reinsurance but continually explore new horizons of cyberattack risks and space travel insurance.
AI Insurance Dimensions of Industry
The insurance industry dominates the medals table by all touchstones, the number of companies, integer of clients, revenue volume, and workforce size. However, it has been much slower in embracing AI. Regulated package plans result in some unwanted services and higher payments by clients.
Insurance focuses on personal contact and care of the agent to the customer. In contrast with customized services, the slow and regulated insurance process has rarely created a happy client experience. Covid-19 exposed vulnerabilities of this personal intervention approach. Companies can find assistance in the adaptation of AI.
Bird’s Eye View Of Artificial Intelligence
When speaking about AI, Professor Dr. Nilsson of Stanford University says, “Artificial intelligence is that activity devoted to making machines intelligent, and intelligence is that quality that enables an entity to function appropriately and with foresight in its environment.” The simple understanding of AI could be for computerized instruments to perform specific activities which generally require human intelligence.
AI performs automated tasks to save time with error-free results. AI technologies are related to Machine learning, deep learning, neural networks, and Natural language processing. Text, speech, image, video, qualitative and quantitative sets can be classified and analyzed. AI logarithms apply regression for correlations and compare actual and required results.
AI algorithms use classification on qualitative data to label binary files and categorize them in legitimate software, spyware, etc. The third algorithm used by AI is Clustering to identify common attributes, analyze traffic sessions and identify groups originating from the same source.
Companies can use AI for pattern recognition, optimization, comparison, solution, and application in day-to-day business problems.
Scope of AI in the Insurance Industry
Machine learning helps create better-designed insurance policies to meet customers’ needs. The Sky is the limit to exploring, modifying, adapting, and applying AI in Insurance Industry. The four areas to focus on for AI could be, Operations/ Customer service to save time, Prevention of waste/Fraud, Claims Management, and Client Analysis.
Contemporary companies generally use chatbots, Intelligence platforms, wellness engines’, financial tools, Ding Sun Bao software, and other AI applications. The areas of assistance are Lapse management, Assessor assistant, Property analysis, Experience for Customers, and Prediction studies.
AI Insurance Platforms Supporting Industry
An HTF MI Business Intelligence Report titled “Artificial Intelligence (AI) in Insurance – Thematic Research” points out that AI models are most popular among non-life insurers, as products are less complex and easier to underwrite. The report identified that Insurers prefer to partner with specialist AI technology providers rather than developing in-house solutions.
The principal area of AI success in insurance lies in generating an enjoyable customer experience. Matt Adams, a PwC partner, based in New York, says that an increase in AI customized products for consumers and businesses creates continual interaction with clients for greater loyalty and up-selling.
The Top ten AI platforms for the Insurance sector are:
- CCC Smart Estimate
- Lapetus Solutions
- Allstate’s ABIE (“Abbie”)
AI Insurance On-Demand
Insurance firm Trov, in collaboration with Slice Labs, provides on-demand insurance coverage for homeowners, renters, and small business owners through an app that simplifies the insurance process. Customers no longer have to call a 1-800 number, be guided to a local agent, make an appointment, visit the agent, get paperwork prepared, and sign insurance. It is much quicker now. Customers can do it online or on their smartphones.
Insurance companies can extract valuable Data for lead generation by using ML and predictive analysis. In addition, chatbots are instrumental in generating and converting leads and identifying and meeting the changing demands of customers with real-time interactions.
AI Insurance Agent Interaction
Liberty Mutual AI applications connected with Amazon Alexa take care of many functions such as answering questions, providing insurance estimates rapidly, and connecting users with the nearest agent that can satisfy their needs.
- Virtual agents guide the online buying process.
- Claims Management Process
Lemonade has linked machine learning (ML) with chatbot technology in the claim handling process. ML models assess damage severity, predict repair costs using past data, and can use this information to help settle uncomplicated claims.
The company Lemonade says that its chatbots, Jim and Maya, can secure a policy for consumers in less than two minutes and settle a claim within three minutes. Car damage recognition and Healthcare claim settlement customers receive better services.
Risk Analysis/Waste Reduction/ Fraud Detection
Transaction analysis identifies, predicts & prevents fraudulent claims. Companies assess claims, predict health risks, and identify waste with AI. Liberty Mutual uses Amazon Alexa to offer advice on managing risk.
AI Insurance Customer Engagement
NLP is helping to address queries on policy. The Trov app allows consumers to turn on or off coverage with a single swipe on their phones, and chatbots are incorporated to automate claims processing. The other areas are:
- Face recognition & voiceprint to reduce customer verification time
- Prediction & reduction
- Upsell & Cross-sell products
The chatbot is a single entity that has reduced the headache of the insurance industry by 50 %. These bots offer digital services and have conversations with human beings. The services are of immense value as they answer questions and route calls, reducing human traffic to only higher-level requests. They also provide around-the-clock advice services, billing information, and answers to common inquiries and transactions.
Chatbots can also help with cyber-security password issues and simple documentation to conserve staffing for more complicated issues. Insurance companies like Geico, Allstate, and Lincoln Financial insurance have taken the lead as pioneers of using chatbots in insurance. However, now most of the other major companies are using it.
Companies must remember an important aspect of absorption of technology. Change from people-intensive systems to AI-intensive systems takes reasonable time. Enrique Laso, the Executive Vice President of information technology at MAPFRE USA, stated the following while explaining the experience of AI induction in his company:
“We were probably too optimistic about when business outcomes would be achieved. We now underestimated the complexity and difficulties during the conversion period as people are using both platforms to serve existing customers.”
AI has brought a silent revolution to Insurance Industry. It has helped optimize the use of massive data to craft individualized policies, has automated underwriting processes, and has provided companies the ability to give accurate estimates to customers.
The clients are also experiencing more swift and accurate information: speedy claims management, round-the-clock services, and superior decision management. The initial steps in this transformation are Insurance advice, claims processing, and fraud detection. In the future, focused technology exploration will be a real Force Multiplier for the industry.