AI-based Insurance Claims Management Systems May Even Be Tricked

This year’s emerging risk insights reflect the uncertainty currently shaping the global risk landscape of the insurance industry, including geopolitical tensions, volatile financial markets and technological innovations such as generative AI.

The 11th edition of Swiss Re’s SONAR report reveals that the threats on the horizon develop as dynamically as the technological, geopolitical and social changes in the world today.

Geopolitical tensions and financial market volatility persist in the post-pandemic world marked by the war in Ukraine, rising interest rates and inflation. In parallel, global polarisation and conflict may give rise to mutually exclusive markets (see New Era of Insurance Claims Management and Customers Experience).

Even the risk of nuclear events is heightened. Inflationary pressures bring into question the sustainability of sovereign debt across the globe. The threat of a new pandemic still looms. The recent outbreaks of Avian influenza are the largest to date, in different parts of the world.

Emerging risk in the technology space

One key emerging risk identified in the SONAR report that spans across technological, economic, social and environmental issues is the “Arctic opening”.

Another emerging risk in the technology space could derive from complex machine learning systems and artificial intelligence (see How Artificial Intelligence Can Help Insurers Reduce the Inflation Impact?). These two high-impact areas are driving the next wave of technological advance.

Through the use of AI in insurance claims management, an automated claims processing workflow can optimize human-in-the-loop processes, speed processing times, mitigate fraud, and enhance the customer experience.

The SONAR report emphasises how the rise of AI is increasing opportunities for fraud and intellectual property loss, such as phoney creditworthiness ratings or false insurance scores (see How Does AI Technology Impact on Insurance Industry?).

In car insurance, AI-based insurance claims management systems may even be tricked into seeing massive damage where there is none.

If AI gets hacked, it could even result in physical harm by causing autonomous car crashes or medical misdiagnoses.

Computer vision models help insurance claims adjusters

Computer vision is the technique by which AI models can derive meaning from visual inputs such as images and videos.

For example, insurtech companies are using drones equipped with computer vision technology to instantly assess damage to cars, factories, homes, disasters, etc.

Advanced analytics are good at detecting and preventing fraud. The FBI estimates that fraudulent claims cost more than $40 billion annually in the U.S. alone. As a result, it is a burden on insurers, forcing them to raise premium prices.

Traditionally, insurers manually check the relevance of claims to determine whether they are fraudulent or not. This has been a time-consuming and inefficient process. For instance, according to McKinsey, for every 10 health insurance claims submitted, insurers classify up to 7 as unusual, meaning potentially false or fraudulent, based on company policy. Re-investigating 70% of claims is an unrealistic suspicion rate that shows that people are not effective fraud detectors.

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Full Report — https://beinsure.com/ai-insurance-claims-management-systems/

More Outlooks & Review — https://beinsure.com/