Along with big e-commerce companies, the technology has impacted insurance businesses as well. The way customers shop online products in the same way they can buy policies as per their requirement. It might sound weird, but it is the reality.
Insurance businesses have left behind their obsolete way of working and embracing various technologies for their insurance process. According to an analysis, 75% of consumers across the world are satisfied with digital insurance information. In today’s market, consumers demand tailored solutions and Artificial Intelligence(AI) is making that viable for insurance companies in many ways. In a nutshell, AI is changing the way of interacting with customers in the insurance industry. This might increase your curiosity.
Well, from a long time, insurance companies were looking for effective methods to improve their operational activities so that they could focus on their claims process, maintain customer relations and increase the profitability of their business.
Basically, insurance businesses have to streamline their backend tasks to maintain a smooth workflow in the frontend. So, here comes AI into the picture. There are 5 ways that explain how AI is helping insurance companies in every aspect.
But firstly, you need to understand how AI works, along with increasing the profits of the insurance business and providing consumers services as per their need.
Introduction to Artificial Intelligence(AI)
AI is described as any task performed by a program or machine that, if a human carries out the same activity it would take approx. 2 days to accomplish the task. And AI never sleeps.
AI systems indicate some of the common human intellectual behavior such as planning, learning, reasoning, solving problem, representing knowledge, perception, motion, and manipulation to a lesser extent, and so much more. 75% of the insurance companies presume AI to change the insurance industry for a better growth, in accordance with a recent study.
You might be thinking how is this possible?
Let’s plunge into the details of AI impact below.
What will be the impact of AI on the insurance industry?
Claims Processing- Earlier, Insurance claims processing was the most time-consuming and critical process. But now with AI, the executive who process claims work with motivation and dedication. This tiresome task has become interesting. How is it possible?
Let’s consider the recent case of Lemonade, a Soft backed insurance startup based in NYC that was in news for settling an insurance claim process within three seconds using its claims bot. With the help of AI, Lemonade’s bot reviewed the claims, cross verified the details with the original policy, went through fraud detection and once the whole thing was okay, they sent wire instructions to the bank to pay the claim. In this way, AI is helping insurance companies to ease claiming workflow.
Improved Marketing- The term “personalization” is very common in the world of marketing. It helps businesses to connect with their customers on an emotional level. But many insurance companies were far away from this concept.
But now integrating with AI, insurance companies can gather useful information through machine learning and understand the needs of customers deeply. This will help to run marketing campaigns that can be a proficient step in the insurance sector.
Let’s consider the example of USAA. They use a Watson as a virtual assistant and her name is Eva. Customer asks questions to Eva regarding their policy or claims related issues and based on these question Eva give personalize suggestion through automated emails.
Effective Underwriting- The very first thing that will change in the insurance sector with AI is the underwriting process. With the emergence of loT, there has been an outburst of data in the insurance companies. Take the case of FitSense. They gather information of customer’s health data from multiple devices by using AI. These devices go through customer’s social profile that includes LinkedIn profile, Facebook posts, tweets, etc., to collect data that evaluates the risk of the person. This profile help insurance companies to simplify their underwriting process and price more efficiently based on the collected information.
Chatbots and Virtual assistance- With the help of AI, now customers can buy any insurance coverage. It has been estimated that by 2025, 95% of all the customer interactions will be driven by chatbots. If you are using Whatsapp or Facebook Messanger, then you have already used chatbots. So now the question is how insurance companies use Chatbots? From embarking consumers to detecting fraudulent claims, everything can automate with the help of chatbots.
Well, here are two best cases:
- With the help of AI, developers have created an EVIA (Expert Virtual Insurance Agent) that make sure the information of the consumer’s car insurance is submitted. It automatically saves all the personal information from driving records and time of consumer from long insurance forms.
- GEICO’s also introduced a virtual assistant “Kate” in January 2017. She is capable of conversing with consumers via text or voice recognition.
Data is the core- Collecting data is not a new AI trend; it is an extension for insurance companies. It gathers consumer information to improve their experience. Approximately, 80% of insurance executive have confidence in artificial intelligence that it will transform the way insurance companies gather information of their customers. How?
According to the statistics by State Farm, “Each day in the United States approximate 9 people are killed and 1,000 are injured in crashes that are reported to involve a distracted driver”. By adopting dashboard cameras to understand driver’s behavior; State farm is trying to reduce the number of accidents that are caused by distracting driving.
In a nutshell, every aspect of an insurance business, from underwriting to building a relationship with customers, to managing insurance back office, to mitigating risks to settling a claim have problems that can be solved by using Artificial Intelligence.