How is the artificial intelligence shaping the future of insurance?
Lately Artificial Intelligence (AI) and the trending ChatGPT platform has been in a spotlight due to the wide range of possibilities that it’s providing. Despite the recent wave of popularity, AI has been an integral part of the insurance industry for quite some time, revolutionizing the way insurers assess risk, underwrite policies, and interact with customers. It’s clear that it has the potential to transform the industry to the next level, making it more efficient, cost-effective, and customer-centric. But what exactly insurers and insurance holders can expect from it in the nearest future?
AI has brought in a tremendous change in the way the insurance industry performed a few years ago. Insurance was normally associated with loads of paperwork, time-consuming meetings, filing complicated claims, and waiting for a long time for a decision. AI in insurance has brought in automation that has started rebuilding the trust toward insurance providers and helps in stimulating business growth, lowering risks and frauds, automating various business processes to reduce overall costs and provide the best customer service possible.
To stay competitive, it has become crucial for insurers to adopt the latest technologies like machine learning, robotic process automation, natural language processing (NLP) and more. One area where AI is being used extensively is in claims processing. AI-powered tools can analyze and interpret claims data, identify patterns and anomalies, and make recommendations for further action. Some insurance companies are using NLP algorithms to analyze customer claims forms and identify the key details of the claim, such as the type of damage, the location, and the date of the incident. This information can then be used to determine the validity of the claim and to initiate the claims process without the need for human intervention.
For example, one way how the machine learning has been successfully implemented at If in health insurance claims, is picture reading. The main issue that required a solution, was that service providers usually issue a bill and payment confirmation document in a printed version. For insurance holders it requires a significant amount of manual work to enter data when submitting a claim. We came up with a solution — to use Microsoft Cognitive services to read text from image and our own solution to “understand” a content. It is now used in If Mobile application and it’s able to recognize the total amount of service fee, service provider’s registration number and name, date and time, personal identity number, document number, thus saving time and avoiding manual work.
As for the cases when the algorithm makes a mistake, it’s detected by Claims department and reported to our IT. Then we train the algorithm again to make sure that the error is eliminated. If we’re talking about data privacy, Microsoft Cognitive services doesn’t share the data to third parties and deletes them after 24 hours, so the risk of data leakage is very low.
Another way in which AI is being used in insurance is to detect fraud. Insurance fraud is a major problem, and traditional methods of detecting fraud are often time-consuming and ineffective. However,
AI-powered fraud detection tools can analyze large volumes of data and identify suspicious patterns and behaviors that may indicate fraud.
Some insurance companies are using machine learning algorithms to analyze customer data and identify patterns of behavior that are consistent with dishonest activity. These algorithms can detect patterns such as multiple claims for the same injury, claims for injuries that are inconsistent with the reported incident, and claims that are submitted from unusual locations or at unusual times. It’s clear that in the nearest future AI tools will be leveraged at the highest level thus making it almost impossible to defraud insurance companies.
Another important field where AI has made a crucial improvement is in risk assessment by analyzing vast amounts of data from various sources. This enables insurers to identify potential risks and prevent losses before they occur.
For example, our IT team at If Insurance has created a system that analyzes data about disastrous weather patterns thus showing where the highest risks are. Using those data we can do preventive measures for global industrial clients, helping them to make the best decision for developing their businesses in safe locations.
Finally, insurers are vastly using AI to enhance the customer experience as well. Chatbots, virtual assistants, and other AI-powered tools are being used to provide customers with quick and easy access to information and support. These tools can answer common questions, provide guidance on claims processing, and even initiate the claims process on behalf of the customer.
As an insurance company we receive a large number of incoming e-mails every day. To take a proper care of the online correspondence, e-mail sorting is a must, to guarantee that the message will be delivered to the right recipient. As it is important for us to react on our customers’ needs as soon as possible, we created an AI-powered solution. We leveraged machine learning to predict if incoming e-mail contains sales opportunity, customer churn or claims case so the e-mail could be forwarded immediately to the responsible person.
This solution has eliminated manual work and unnecessary time-waste, and has contributed to processing our clients’ needs much faster. There is also a solution that we created that can read the tone of the e-mail and determine whether the sender is angry or dissatisfied so we could react to each mail and the existing issue rapidly and accordingly.
There is no doubt that AI is today and the future of insurance. Leveraging various tools of AI technology will automate the insurance processing with minimal human intervention. I believe that by saving costs and time it will help the industry to come up with better product categories and more personalized offers that will be generated on data collected from various sources.
However, it must be kept in mind that the adoption of AI also poses several challenges, such as data privacy, security, and ethical considerations. Insurers need to ensure that they are using AI in an ethical and transparent manner and protecting their customers’ data privacy. They also need to ensure that AI-powered algorithms are secure and not vulnerable to cyberattacks.
The future of the insurance industry will take a steep curve to achieve new heights with the implementation of various AI technologies. It will not only impact the insurance companies but also insurance holders, providing them more tailor-made products and even more convenient and rapid customer service. And we, insurance IT experts, are here to make it happen.
