How Insurance Can Enhance Customer Experience Using AI
AI is finding it’s way into every sector and it has shown what it can do. Insurance companies have also started adopting AI into their business operations.
Policy Creation
Policy are created based on analyzing previous data to recognize the pointers in the formation of good policy evaluating risk. AI is quiet capable recognizing patterns among millions of data and finding correlations among them. Most of the policy is rule based focused on number of parameters. These parameters are well studied to identify the risk and reward. Deep Learning models can understand this nuance and domain knowledge using previous data about the policy parameters, number of claims, left out pool capital, customer demographic and behavior etc.
With the assistance from actuary these variables can be identified on the data and AI models can be set to identify the best policy metric. Most important part is creating relevance between data parameters that would allow AI to understand context, semantics, intent leading to better models.
Claims Management
Claims Management is about validating the customer provided info about a particular event is correct to assess a claim. It’s a task that can consume time but with the advancement in Computer vision, AI models are recognize damages and provide appropriate claims value to damages. It can validate the documents and quicken the process of claims management.
Especially in Car and housing insurance. From a array of images the damages can be assessed by the AI systems to classify customers on the amount to claim.
One of best thing AI can do is predictive analysis, which means it can predict from previously available data about the number of claims that can happen in the coming year. Every company makes a forecast model but with AI, they will be more accurate. Better forecast leads to optimal usage of resources and redeployment for growth.
One of the best things about AI is, it can recognize the frequent patterns, correlation in the claims data so that it helps in better modeling of policies.
Underwriting
Automated underwriting is gaining popularity with AI. They monitor parameters in the customers report to evaluate risk and reward ratio as well compare with the overall insurance stack to figure out how well this customer can qualify for this policy. It’s rule and case based on some scenarios.
What is different with AI? When you give enough data, AI models can recognize patterns, new parameters, correlation between the data and customers. This helps in better classification of customer based on risk and also premium pricing can be well managed as our model gets more accurate. This approach mitigates risk from the underwriting process.
Genetic Algorithms can be used since its a large space problem. There will be multiple parameters to recognize before coming to a conclusive decision. Once a right algorithm is set, the degree of optimization will be far beyond human precision.
Marketing
Marketing is always the sector that first imbibes new technology. Chatbots have been deployed by increasing number of insurance companies. There are number of things insurance can do to enhance their customer experience. Natural Language processing can help find potential customer by evaluating the customer care logs and chat history.
Customers leaving good comments are potential for up-selling new products. What differentiates sale and marketing is personalization. Customer care logs possess ton of information to find about the requirement of the consumers. Combining it with offers/discounts are be a real value add.
Recommender systems can also be deployed to identify the demographics and the insurance need to custom tailor a personalized solution. Implicit data is important as it reveal where the customers interest are.
It’s leads to modeling the customer behavior pattern and nature of customer then products can be designed to match their requirement. It leads to higher customer engagement on your website and higher conversion rates. The data can be used re-target customer for other products that can bring value to them.
There is a lot more the insurance companies can do to make the processing of insurance efficient, reduce cost drastically on premium, attract more customers, better risk to reward ratio, increased customer pools leading to stability. The first movers will gain traction in the marketplace with AI.
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