How Artificial Intelligence Is Changing The Future Of The Insurance Industry
By George J. Newton
As artificial intelligence continues to take the world by storm, an increasing number of industries are turning to automation to optimize business processes. The insurance industry is no exception. Many insurance companies are already implementing some form of automation, but significantly more are expected to join them.
The Benefits Of Using AI For Insurance Companies
The implications of artificial intelligence for the insurance industry are enormous. Since many processes are quantifiable, companies will benefit immensely from automation. Insurance companies are becoming increasingly aware of this fact. In 2016, the global insurance industry spent $76 million on cognitive/AI technologies, but this number is predicted to increase to $571 million by 2021. This confirms that the insurance industry is on the cusp of a profound technology-oriented shift.
The most obvious advantage of automation is efficiency. Historically, the insurance industry has been characterized by slow processes that frustrate even the most patient customers. With AI, the speed of several processes can be drastically improved. Technology enables customers to purchase insurance faster and more tailored to their needs, reduces processing times when they file a claim, and minimizes arduous paper-based processes. By improving efficiency using AI, insurance companies will be able to do business faster while enhancing the customer experience.
In terms of claims management, AI can ease the workload of insurance adjusters. Using artificial intelligence, adjusters will have an easier time extracting the relevant data necessary to make informed decisions. AI’s capabilities in pattern recognition facilitate meticulous detection of potentially fraudulent claims and notify the adjuster. This equips insurers with the tools to accurately and quickly process claims.
Another advantage AI offers insurance companies is its potential for customer service improvements. Employing artificial intelligence in customer service ensures support is available to customers even during off-peak times. “Customer-centric insurance companies have a significantly better chance of attracting new and retaining existing clients over their competitors,” explains Brian Bowman, a marketing writer at 1day2write and Writemyx. “AI can deliver fast, efficient, and 24/7 customer service, much to the advantage of businesses.”
Concerns About AI In The Insurance Industry
Thanks to machine learning capabilities, AI is continuously learning with each new claim it encounters. Its ability to sift through vast amounts of data and recognize patterns that would otherwise go unnoticed is invaluable to insurance claims management.
“An argument could be made that AI eliminates human error and biases in the insurance industry,” according to Richard Penland, a journalist at Britstudent and Nextcoursework. “Eventually, if not already, AI’s better-informed and error-free decisions supersede those of a human.” Humans indisputably hold beliefs and values that shape their decision-making regardless of their effort to be objective. On the other hand, AI bases its decisions entirely on numbers and patterns from the data.
In terms of efficiency, AI is the clear winner. However, some decisions, especially ones with life-altering implications require a human conscience. This beckons the question that most insurance companies will ultimately need to ask themselves: can AI be trusted to make possibly life-defining decisions?
How Are Insurance Companies Implementing Artificial Intelligence?
Insurance companies have already implemented AI to optimize several processes.
Like many other industries, plenty of insurance companies have adapted automation in customer service processes. Chatbots, for example, are used to provide customers with 24/7 personalized support. Natural language processing and neural network technologies enable chatbots to understand and answer queries from customers over chat, email, and voice calls. This reduces the cost of operations for many insurance companies.
Some insurance companies are taking advantage of machine learning to recommend personalized policy rates and useful services to their customers. This incentivizes consumers to purchase insurance specifically matched to their needs and lifestyle.
Many insurance adjusters now utilize artificial intelligence to handle the more tedious aspects of their job. They also use neural network technology to identify potentially fraudulent claims. This allows adjusters to process claims more efficiently and accurately.
It’s clear that the future of the insurance industry, like so many others, heavily involves artificial intelligence. Automation offers insurance companies cost-effective solutions to optimizing various business processes. With the shift towards AI, many employees are understandably concerned over the future of their jobs in the insurance industry. While it is unclear whether or not AI will ever be trusted to make meaningful insurance decisions, for now, their role in the insurance industry is increasingly becoming vital.