Insuranceciooutlook

AI: Allowing Insurers to Corner and Flag Unusual Patterns

By Insurance CIO Outlook | Friday, April 19, 2019

Probably the insurance industry isn't the first area of human endeavor one thinks of when someone mentions words like innovation, artificial intelligence, and high tech. In reality, however, it is one of the first to embrace the change. The industry is on the brink of a tech-driven seismic shift. In order to embrace this change, a focus on specific areas can position carriers. Insurance companies rely heavily on forecast about risks associated with person, company, and organization. More and more information they have about them, and the more precise this information is, the more probable they are to make a correct assumption, either saving money or earning extra income. AI's advent means insurance companies should rush for ways to get the much-needed edge over the competition to implement them in their work. But how exactly is the industry changed by these innovations?

The latest research by Genpact, a global professional services company that provides a modular AI-based platform, found that 87 percent of insurers invest more than $5 million in AI every year, and over half are preparing to morph many of their current business procedures in the next three years. Insurers use AI to make smarter decisions about underwriting, manage risk better, detect fraud and create positive user experiences.

Check out: Top Artificial Intelligence Companies 

AI and machine learning tools allow insurers to corner and flag unusual patterns that a human could perhaps miss, possibly reducing these enormous amounts, as well as the cost of customer premiums. The AI-influenced fraud detection solution for Shift Technology, Force, is already being used by more than 70 insurers worldwide. In order to generate a fraud score for each claim, it analyzes vast amounts of data from multiple sources and has an average hit rate of 75 percent higher than many other automated fraud detection systems.

Due to constant progress in the industry with data and AI, carriers can now do much more for their customers. They can help manage risk, they can better predict risk, and they can help advise customers on how to forward-looking risk reduction. This means that over time the frequency and severity of losses decreases.

By 2030, AI will notify an insurance company of every major decision. But there will be far more than three employees in the ideal company and they will certainly be allowed to touch computers. There is no substitute for proper old-fashioned claims and underwriting experience and that is going to be part of the organization somehow still. 

Few Artificial Intelligence Companies: Ecompex, Fifth Dimension, Splunk

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