Artificial intelligence (AI) is disrupting the insurance industry and CEOs are keen on implementing the latest innovative solutions for business productivity. AI can help insurers assess risk, detect fraud, and reduce human error in the application process. The result is insurers who are better equipped to sell customers the plans most suited for them. Customers benefit from the streamlined service and claims processing that AI affords due to automated operations that cater to business urgencies.
The “applications” that need to be filled out for insurance plans are getting smaller and more automated thanks to AI. This means that insurers can spend less time on applications and more time on other things—like taking care of customers or making sure their business is running smoothly.
That’s not just good news for customers. The streamlined customer services and claims processing that AI affords is a boon for insurance companies and their staff as well because it allows them to process more claims faster and more accurately than ever before.
AI in Insurance Industry
This article is for insurers, business owners, and insurance company customers interested in seeing how AI benefits them.
Listed below are 3 ways AI is disrupting the insurance industry.
1. AI helps insurers assess risk more accurately
Automatic text processing analyses large amounts of data gathered by insurance companies.
Insurance companies are facing the same problems that other industries face. They need to analyze large amounts of data and make decisions based on that data. The insurance industry is unique in that it deals with so many different types of risks, from weather events to natural disasters to terrorist attacks.
It allows them to quickly identify trends and patterns in their decision-making process, which helps them save time and money while increasing customer satisfaction.
The processed data provides a more accurate analysis of what customers need and what they are likely to buy.
2. AI detects fraud, saving insurers money
The insurance industry has been slow to adopt AI technology, but the benefits are clear: Insurers can save money by detecting fraud before it happens and by automating routine tasks.
Fraud is a major problem in insurance, costing insurers around $3.8 billion annually. Because fraud can be difficult to detect and enforce, insurers are turning to technology to help them stay one step ahead of fraudsters.
AI technology can detect risks that human investigators may miss. AI systems are also more efficient than humans at reading through records, which means they can process more data in less time and make fewer errors when they do so.
Insurance companies rely on human inspectors to identify suspicious claims. But as the number of claims grows and insurers shift their focus to automated underwriting and claims management, this approach is no longer sustainable. In fact, it’s becoming increasingly difficult for humans to keep up with the pace of change.
The solution? Use AI technology to monitor transactions and analyze them in real time. This way, you can spot any suspicious activity before it turns into a claim.
Here’s how Tezo helped a Fortune 500 insurance group automate fraudulent claims analytics, plugging revenue leakages and transforming data.
3. AI reduces the time it takes to process applications
Insurers can now use AI to automate their underwriting process and reduce the time it takes to get a policy. Using chatbots, for example, insurers can gather information from potential policyholders quickly and efficiently.
Another area of AI disrupting insurance is while insurers used machine learning for underwriting, they have been doing so manually. This has led to inconsistencies in the way policies are written, which can lead to higher premiums for customers with lower claims history or those who are not a good fit for the product. With machine learning, insurers can use artificial intelligence to automate risk assessment so that they write policies more accurately and effectively.
The result will be better risk assessments and lower premiums for consumers, which is good news for everyone involved: Consumers save money; insurers make more money, and policyholders are more satisfied with their coverage than ever before.
It’s easy to see how AI can help insurers save money, reduce human error in the application process, and make their businesses run more efficiently by streamlining processes like underwriting, claims, governance, business analytics, marketing, sales, and product development. Artificial Intelligence combined with InsurTech platform tools is a revolution for insurers looking to make the most of agile business transformation. But transformation is not just about saving money or improving customer loyalty – it’s also about preparing for a wave of new business opportunities as more people embrace artificial intelligence technology to improve the quality of IT operational output.