October 10, 2018
It’s starting to look very likely that the unnecessary delays in insurance claims will become a thing of the past. Artificial Intelligence has already covered many facets of the Finance industry, and now it is all set to revolutionise the insurance sector as well.
Artificial Intelligence in Insurance is not something new, at least, in generic use cases. In fact, the concept was already starting early development back in 2017, the InsurTech industry witnessed a record growth of 25% , and startups such as CapeAnalytics and ZenDrive started working on automating the risk calculation for properties. However, it is only recently that the exponential growth of popularity in the AI industry, and the more accepting attitude of the public, has paved the way for the insurance sector to invest and grow with AI applications.
Some recent articles on the subject have brought attention to the secluded development that has been taking place in the industry. For example, car insurance service provider, Naked, is actively using AI and Machine learning to improve the overall experience of car insurers. Similarly, another startup, Metromile, is using machine learning algorithms to personalise the amount of premium a car insurer has to pay.
These examples are just a few that have earnt media exposure. Many other startups and established companies are planning and creating concepts to deal with the major pain points of the industry as mentioned below-
As it appears, from the recent reports on the topic, the revolution of this new age is already on the horizon, wherein most, if not all, of these pain points will be addressed solely by AI applications, whilst improving the overall customer experience of the service.
As McKinsey stated in ‘Insurance 2030—The impact of AI on the future of insurance’, there would be ‘four AI-related trends’ that will shape the insurance industry of the future. The explosion of data from connected devices, increased prevalence of physical robotics, open source and data ecosystems, and advances in cognitive tech.
What’s even more exciting, is that the traces of these trends have already started appearing in the industry. Although, the first applications of AI that we may soon witness, other than the ones already mentioned above, would include improvement in customer experience, reduction in the fraudulent claims, quicker response to the changing needs of the market, and cyber insurance.
For improving customer experience, AI applications could be used to eliminate the unnecessary delays in claim resolutions and in quick processing of the data available. As Harald Gölles, CTO of AI provider at omni:us, puts it, “Overall, artificial intelligence allows organisations to be more customer-oriented by personalising their experience, better understanding customer behaviour, streamlining the claims process and preventing fraud”.
Similarly, by utilising AI in the initial phases, insurance companies are more prepared to deal with the upcoming market trends. “AI technology has improved drastically over the years and can be quickly and seamlessly integrated into businesses in just a matter of weeks, solving a variety of business needs.” Explains Golles.
For Cyber insurance, the CTO John Cammarata, Vice President of Development at Point Source says, “The cyber threat landscape of a company in the digital era is ever-changing, and the feedback loop from a machine learning system (along with prediction) enables a real-time view of a company’s cyber risk.” This way, AI in the insurance sector won’t improve the existing conditions, or solve the prevailing problems. It can also be used to create more avant-garde solutions to the problems of the coming digital age.