Artificial Intelligence (AI) in Insurance

Updated on Jan 13, 2020

Artificial intelligence (AI) and machine learning are revolutionizing the insurance industry. Here’s what you need to know.

Machine learning is a growing and diverse field of AI which studies algorithms that are capable of automatically learning from data and making predictions based on data. Machine learning is one of the most exciting technological areas of study today. Each week there are new advancements, new technologies, new applications, and new opportunities. It’s inspiring, but also overwhelming. That’s why I created this guide to help you keep pace with all these exciting developments. Whether you’re currently employed in the insurance industry, or just pursuing an interest in the subject, or working with us at Produvia, there will always be something here to inspire you!

Here are a few ways artificial intelligence and machine learning can be used in the insurance space.

AI in Research

Research is a critical component of innovation of the world’s best companies. Digital transformation is no longer the driver for innovation. Today’s companies are using machine learning and AI to conduct state-of-the-art research using computer vision, natural language processing, and deep learning technologies.

1. Claims Management

• Classify life insurance risk get a quote while maintaining privacy boundaries (Kaggle, Prudential, 2016)
• Predict bodily injury liability insurance claim payments based on the characteristics of the insured customer’s vehicle (Kaggle, Allstate, 2011)
• Identify potential purchasers of caravan insurance policies (Kaggle, 2016)
• Predict cost & claims severity (Kaggle, Allstate, 2016)
• Identify factors that contribute to severe worker’s compensation claims (David George Mathews, 2016)
• Predict mortgage risk using deep learning (Justin Sirignano, 2016)
• Calculate insurance premium according to risk (Raj Ramesh, 2016)

2. Underwriting and Loss Prevention

• Perform automated insurance underwriting using machine learning (Bonissone et al. 2002)

3. Agent Management

• Classify agent performance based on several attributes like demography, products sold, new business (Kaggle, 2016)

4. Business Management

• Predict annual income, premium and loss reserving, loss-payments using machine learning (Son et al., 2016)

5. Fraud Detection & Prevention

• Identify fraudulent medical insurance (Shi, 2016)
• Detect fraudulent and abusive cases using machine learning (Kose et al. 2015)
• Identify fraud using data mining techniques (Goleiji et al. 2015)

AI Startups

There are many startups that are already using AI and machine learning from claims processing to telematics. At Produvia, we identified five categories for innovation.

1. Claims Management/Processing

• Shift Technology uses machine learning to analyze insurance claims
• ControlExpert uses machine learning to perform insurance claims for the automobile industry
• Cognotekt and SnapSheet optimizes business processing using artificial intelligence
• MotionCloud offers mobile claim management solutions
• RightIndem offers 1-day claim settlement
• Tractable is using a deep learning system to simplify the triage process after a car accident. Instead of manually scanning pictures, they use machine-trained estimates for repair costs, enabling agents to accelerate a claim past triage and into repair, salvage, or appraisal.
• WeGoLook is an ‘Uber of inspections’ that can dispatch 30,000 ‘lookers’ to collect real-time data, photos or video on behalf of insurers for automotive and property inspections or insurance claims
• Lemonade uses AI and machine learning to handle claims and sales. Lemonade is also addressing consumer-to-carrier transparency by applying a flat, upfront fee to premium income rather than profiting from unclaimed premiums

2. Underwriting and Loss Prevention

• Haven Life is using artificial intelligence to offer basic products, with fast and simple underwriting, enabling sales and services via the digital channel

3. Marketing, Customer Experience, Customer Relationships, Customer Engagement

• Oscar and StrideHealth are trying to make insurance user experience simpler
• Captricity is using machine learning to convert handwritten files into structured data, and this can be used to better understand the final customer
• ValChoice ranks the service of insurers to the benefit of the client

4. Chatbots & Virtual Agents

• Spixii is an automated insurance agent who helps people buying any insurance coverage
• Cognicor is a virtual assistant that offers customer care services
• RiskGenius is an intelligent comparator which identifies gaps in coverage for the customer
• PolicyGenius looks for the best solution that fits customer’s needs and characteristics
• Brolly and Knip is trying to simplify personal insurance

5. Telematics

• Root is using machine learning to identify patterns in the location and motion data, give people a driving score, then give them an insurance quote

Start an AI project

At Produvia, we produce intelligent software. We specialize in artificial intelligence, machine learning, and deep learning. Let’s chat! Visit us at produvia.com