What's Making the Insurance Industry Smarter?

By Insurance CIO Outlook | Monday, August 24, 2020

The amazing capabilities of AI, ML, and Predictive Analytics will lead to the transformation of various insurance processes beyond recognition.   

FREMONT, CA: Technology is transforming various aspects of the insurance industry. Innovative digital tools are streamlining insurance processes. Data science is one of the many areas in insurance which is impacted by technological advancements to a great extent. Data science is fueled by artificial intelligence (AI) and predictive analytics capabilities and offers insurance companies with actionable, concrete insights into a wide range of insurance processes. These technologies optimize various functionalities in the insurance industry, such as the way data, claims, and customers are managed. Read on!  

• Underwriting

Conventionally, underwriting had been a slow process, requiring due diligence processing and data analysis before policies could be issued. However, AI and predictive analytics significantly speed up the process enabling the insurers to analyze and process more data accurately and effectively. 

Another important advantage that accompanies the use of AI and predictive analytics is pricing strategies and risk selection. AI can accumulate data from various sources and identify risks, assess the risk potential for each customer, and frame policies accordingly. 

• Claims Processing

Claims processing is another conventional aspect of the insurance industry. Customers have always found it challenging to file insurance claims, especially after they have experienced difficult times, such as in the case of life insurance claims. AI and ML help in this by triaging claims, identifying outlier claims, and automating the processes.  

Triaging is getting simpler as the customers can use a virtual assistant or an app powered by AI and ML to file claims, upload photos of the casualty, schedule inspections, and communicate with the insurance agents. The requirement of human intervention will also be minimal with these technologies, and the entire claim processing can be carried out within the digital space. 

Apart from claims processing, AI and ML can also be crucial components while tracking and identifying patterns in claims. Such a capability enables a better understanding of outlier claims and can also aid in fraud detection. 

• Personalization

Personalization is a trending concept for almost every B2C company. The insurance industry is no exception to the trend. Along with personal attention to their inquiries and needs, people also expect self-serving capabilities in the insurance sector. Thus, catering to these expectations of consumers will be the key to attract new businesses easily and quickly. 

ML and AI can aid the insurance firms with the above by processing massive data sets and offering best-fit policies to the insurers within no time. Using ML capabilities, insurers can offer almost customized policies to the customers.  

AI can also assist brokers while recommending policy rates and coverage levels based on past buying behaviors of each customer. Thus, AI capabilities are turning the insurance business from the hands of skilled brokers to the professionals focused on data-driven results.  

• Employee Retention

Apart from assisting with customer-facing programs and tools, AI and predictive analytics can be effectively used for attracting and retaining productive employees. AI empowers employees with the information and the tools that they need to do their jobs quickly and efficiently. Predictive analytics offers data insights and comprehensive dashboards that impart visibility and offers a platform to the employees. The employees can utilize the data insights to connect the dots with increased customer-centric actions. 

The ever-evolving technology will allow the insurers to identify, assess, underwrite emerging risks, and identify new revenue sources automatically. While the true potential of AI, ML, and predictive analytics might lie in the future, insurance firms who will invest in these technologies are sure to gain an edge.

Read Also:

Top Insurtech Startups

Weekly Brief

Read Also