Application of Artificial Intelligence in Insurance

Over the last two years, we have seen the widespread advent and adoption of AI across multiple industries (be it hospitality or be it healthcare). The idea of digital technologies ruling the financial market isn’t exactly new since Nasdaq in its early days established a secure connected network of trading desks for integrated customer data records. Many global financial companies and banks in those days relied on punch cards and basic computing systems to monitor customer activities. Hence, the concept of Artificial Intelligence in the Insurance industry analyzing data, anticipating results and helping with decision making is not so far fetched after all.

AI could help banks and insurance agencies deliver service with efficiency and quality as it has done for major leaders in other industries such as Hospitality, healthcare, and customer care processes. The adoption of AI can facilitate:

• Sudden disaster-caused damage analysis
• Risk tolerance calculation and assessment for trading desks
• Transaction analysis for banks and financial organizations
• Selection of better investments based on preferences, risks and spending patterns
• Consistent optimization of customer investments and insurance coverage
• Claims analysis, asset management, risk calculation and prevention

Due to its evolved predictive capability, AI works seamlessly with ATMs, mobile payments, and online claims processing. It helps digitally connected individuals take faster and smarter decisions by improving transparency in data interpretations.

For instance, families that harbor major concerns of financial security in retirement phase can opt for investment decisions like 401(k) plans which ensure immense security. AI’s powerful analytical brainwork can guide customers while making wise investment decisions that incorporate their maximum risk potential, premiums preferences and maintenance of funding sources for 401(k) by suggesting improvements in their weekly or monthly expenditure. AI solutions can also aid in customers’ non-retirement investment decisions and insurance coverage.

AI-powered Opportunities for Insurance

Despite the fact that it is difficult to anticipate the full utilization of the applications of Artificial Intelligence in the Insurance industry and automating the business processes, market leaders are optimistic and confident when it comes to reaping the benefits it entails. A promising study by Accenture and Frontier Economics has claimed that AI will increase 10-40% labor productivity in 11 western industrialized countries and Japan by 2035. If this optimistic projection is true, the economic growth is likely to double by 2035.

Considering the current scenario, AI-based products will include insurance coverage for smart driverless cars, smart sensors and factories and cybercrime damages. Furthermore, AI will also empower important processes like claims analysis, asset management, risk calculation, and prevention. For instance, property damage analysis can be conducted through image processing part of AI in Insurance. The same machine can be used to make an informed decision about investments based on intelligent algorithms.

As financial sectors are brimming with the unprecedented bounty of financial, insurance and investment data, the need for integrating Artificial Intelligence in the Insurance industry can drive whole new growth for this industry. Powerful data management tools of AI can help people size up and navigate through pyramids of data while also helping businesses create intuitive and interactive customer experiences.

In a nutshell, here are a few good target areas where AI can achieve significant impact and emerge transformative for the insurance industry as a whole –

• Cost and customer intimacy

Adopting these technological, process-oriented changes isn’t just as simple and plain as introducing new technologies, but it is also about how innovatively to approach the idea of enhancing customer intimacy to fulfill rapidly changing market expectations and adjust cost-related constraints. We have already seen a myriad of success stories when it comes to Artificial Intelligence for Customer Service.

• Market competition and pressure

Due to heightened pressure and surrounding market competition from lean and agile InsurTech entrants, established businesses have to be prepared to battle it out and improve their methods of getting closer to customers while effectively slicing on overall operational costs.

• Innovations, challenges, and future possibilities

With a marketplace that is digitally disrupted, it is hard to merely capitalize on fundamental innovation and common margins of cost optimization when it comes to achieving better growth and revenue. However, insurers are taking the challenge positively since 67% of industry leaders (according to a PwC report) are happy to embrace fresh AI-driven possibilities and find creativity and innovation critical to their organizational growth.

Better Synchronization between Humans and Machines

Insurance CEOs (nearly 61%) are also coming shoulder-to-shoulder when it comes to gaining competitive advantages from the synchronized functioning of humans and machines applying their combined efforts in a common workforce. These new-age advancements and AI capabilities promise to rejuvenate the orthodox elements of the insurance industry as we see it now and foster a well-organized, intelligent and confident ‘growth-accelerating platform’ that reaches far from the frontiers of cost, competition, and customer satisfaction.

Over the years, the importance of operational efficacy in customer satisfaction has become all the more prominent. There is no better time to grab the opportunities brought by artificial intelligence in insurance.