Insuranceciooutlook

How AI is Reshaping the Future of the Insurance Industry

Insurance CIO Outlook | Wednesday, April 20, 2022

Pricing is one of the most promising areas where AI can help the insurance industry. Insurance companies can use AI to more competitively price their policies and personalize them for each customer.

Fremont, CA: Every day, technological advances are bringing changes in industries ranging from retail to manufacturing and even insurance. Artificial intelligence (AI), blockchain, as well as machine learning have the potential to transform the future of business and the way people work and live.

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Every day, technology advances, affecting industries ranging from retail to manufacturing and even insurance. Artificial intelligence (AI), blockchain, and machine learning have the potential to transform the future of business and the way people work and live.

Artificial intelligence meets the insurance industry:

Pricing: Pricing is one of the most promising areas where AI can help the insurance industry. Insurance companies can use AI to more competitively price their policies and personalize them for each customer. A home insurance company, for instance, could use AI to determine a person's marital status, geographical location, and the likelihood of filing a claim in order to set premiums based on the defining criteria.

Claim handling: Insurance companies spend a lot of money on claims personnel, and insurance prices are commonly raised to account for case-solving costs. An insurance company could save money on hiring by automating many of the time-consuming processes associated with claims management and payouts. The amount of time required to process claims could be reduced from several days to hours or even minutes. It would also enable insurers to offer more tailored contracts to customers based on their specific needs.

Detecting Fraud: Insurance fraud costs more than $40 billion per year, and to make matters worse, insurance companies are transitioning to full digitization. However, using AI to detect fraud and prevent risk is an effective method. AI can assist insurance companies in detecting anomalies in claims data and identifying false information that customers use to obtain a lower premium or a larger claim payout.

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