Game-changing influence of AI in the insurance industry
According to Data Bridge Market Research, “AI in the insurance sector which was valued at USD 3.64 billion is expected to reach USD 35.77 billion by 2030 at a CAGR of 33.06% in the forecast period.”
AI has become the “talk of the town” in the insurance world. And, with good reason!
When we think about insurance, things that come to our mind are complex paperwork, pushy policy salesman, and overall a poor experience.
This was the scenario in the insurance sector not so long ago!
Then AI stepped in!
And, things have not been the same in the insurance sector!
Some of the shortcomings of the traditional insurance systems:
- Offline methods of operations had high-cost implications.
- The process of purchasing an insurance policy was tedious and time consuming.
- Traditionally the insurance sector communicated to its audience using difficult-to-comprehend jargon. Besides, there were communication gaps.
- Claims processing, which is the essence of the insurance sector, had several complexities. These made the process long drawn and tedious.
- Traditional processes entailed extensive paperwork. Lengthy forms needed to be filled, and several documents had to be attached.
All these factors led to a poor customer experience. In today’s market, when customer experience is of utmost importance, the insurance sector needs to step up and simplify the process to delight its customers.
Let’s see how AI has proved to be a game-changer in the Insurance Sector:
Automated Fraud Detections
Frauds are one of the main areas of concern in the insurance industry. AI has resulted in a significant improvement in fraud detection. AI algorithms analyse large volumes of structured and unstructured data from multiple sources to identify patterns that indicate fraud. It enables insurers to quickly detect fraud and take corrective action.
AI also helps prevention of fraud by detecting suspicious activities before they get converted into a claim.
AI helps insurance companies save large amounts of money that they would have lost due to fraudulent transactions.
AI automates claims processing activities like data entry, document scanning, damage assessment, and more. Automation of these processes boosts accuracy and speed while reducing expenses.
AI-powered underwriting is bereft of errors and is a lot faster. AI bots analyse large volumes of data including customer data, claims history, etc. Further, AI algorithms can identify risk factors and predict future claims. Accurate underwriting helps insurers optimise the price of a policy.
Effective Risk Management
Bots analyse data from sources like weather forecasts, traffic data, and data from social media to identify potential risks and their impact. This analysis provides valuable insights to insurers who can make data-backed decisions for policy pricing and claims management.
AI-powered chatbots and virtual assistants are available 24/7 to resolve customer queries and guide them through the claims process. They are the simplest way to start the claims process without human intervention. Chatbots and virtual assistants leverage Natural Language Processing to offer a seamless customer experience.
AI bots analyse customer feedback to identify areas of improvement and create customer experiences tailored to the needs of the customers.
Chatbots also help to upsell and cross-sell products based on customer profiles and history.
Providing insurance coverage for equipment failure is an essential aspect of the Insurance sector. AI-powered bots can be deployed on-site to analyse equipment data including usage patterns, performance metrics, etc. These insights help identify potential failures before their occurrence. This helps reduce the risk of claims due to equipment failures.
The overall impact of AI in the insurance sector is reduced risks and frauds, boosting business growth, and reducing costs.
The insurance sector which was overburdened with complicated claims, voluminous documentation, and lengthy procedures, has come a long way thanks to AI. AI and its subsets like Machine Learning (ML), NLP, etc., have revolutionised the insurance industry. AI-powered automation streamlines the claims management processes making them error-free and faster. AI simplifies the insurance processes such that customers can easily understand it and benefit from it.
AI in insurance reduces processing costs by 50-65%, claims regulation prices by 20-30%, and processing time by 50-90%, alongside boosting customer experience.
As AI advances, the technology will further enhance the quality of services provided by the insurance sector.
For organizations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed on organizational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organizations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organizations that are innovating collaboratively for the future.