Technology is an everchanging, ever-evolving field. AI in particular has grown over the years from a concept to an everyday solution in the form of NLP enabled chatbots, voice controlled appliances, smart homes, self-driving cars, etc.
While some industries like IT and retail have been quick to incorporate AI solutions, others like the insurance industry have been slower. Yes, digitization is present in the form of web apps and mobile app, but the complete power of AI is not being utilized.
In this article, we speak about the reason why the insurance industry needs to implement AI solutions, how it is being used, and how you can get started.
What is driving the movement of AI in the insurance industry
Multichannel data collection
Almost every action executed online can be documented (as long as it is within legal rights) and since people spend the majority of their time online, tons of data can be accumulated. A person’s online journey can be mapped to give businesses an idea of their interests, dislikes, preferred channels and genres, etc.
This data can be used by any industry to actually make their customers’ lives better, by presenting services and products they actually need. Same goes for the insurance industry. The way to utilize this data is through AI.
Cross compatibility is now a requirement
As an insurance company, your digital solutions (be it a web app, a mobile app, or a cloud plugin) must work seamlessly across platforms. Today this is not an option but a requirement. This is one reason why data collection is easy, a user can jump from an iPhone to a Windows laptop, their online journey can still be mapped because browsers are now cross-compatible.
Insurance companies need to take this into consideration with their digital tools and campaigns. For example, by collecting health data (like heart rate) form a smartwatch, the risk calculator can be more precise. By analyzing social media data the claims department can be more thorough.
Cognitive technology is highly advanced
One main reason why brands may be hesitant in using technology for customer centric roles is that personalization is lost. Modern day solutions, however, are completely capable of mimicking human interaction. NLP (Natural Language Processing) enabled chatbots for example are able to seem humanly (at least less robotic).
Area of Insurance That Can Benefit From AI
Claims Management
The claims management process involves 4 steps –
- Policyholder makes a claim
- Insurer accepts the ticket
- The claim is verified
- The claim is settled
An AI based application can be put in place to take over some of these tasks and assists in others. Accepting a claim and scraping its data can be done by an automated system. Verification can be done in conjunction with the application, where the app validates through digital data and an officer verifies via physical data. The app also makes parallel processing possible, meaning more work gets done.
Risk Analysis
Risk analysis is a critical part of insurance. Risk is analyzed when a new policy holder is buying a policy, and also of existing policy holders. Risk analysis involves collecting user data and thorough analysis – something that an AI system can do more efficiently than manual processes. Information can be extracted from existing data and also from external sources like social media, to create a detailed risk profile of the customer.
Fraud Detection
Is another vital department in an insurance company. Detecting claims frauds and fraudulent customers is important to save money and reputation. An estimated $80 billion is lost to insurance fraud in the US alone! AI applications can assist officers in detecting frauds accurately, and faster. The system can study multiple data points to find discrepancies which could indicate a fake claim.
Customer Support
An obvious area that can be improved through technology. NLP enabled chatbots can act as frontline customer support execs and in some cases can be the entire support force. This gives companies the option to be online 24/7. A chatbot is also a great way to collect preliminary data that helps support teams resolve issues faster. Lastly, a chatbot is capable to carrying out multiple conversations ensuring all customers are able to get in touch promptly.
How Do You Implement AI?
Setting up a digital solution for your insurance company (or even just a department) will involve the complete analysis of your processes and customers. This gives the technical team a blueprint of what needs to be setup to improve existing processes and also to incorporate/migrate legacy systems.
Drop us a message and we’ll help you get the ball rolling. Don’t worry, consultation is free.