AI is becoming a part of everyday life and institutional and business systems. Insurance has embraced it. Will AI complicate it though? Read on for more.
AI and Insurance: Disruption and Complication
AI has been a promise for half a century. It’s introduction in everyday life as a product and technology – more than just an idea – has slowly made its way through many industries and into the homes of many people across many nations. It is almost normal. This implementation is a sign of how far the technology has come and what it is now capable of. What it also means is that as AI is used more and more then it’s development will accelerate. AI’s capability now will likely be basic by what it can do in only a few years’ time.
AI is starting to be embraced by many industries, with insurance being one of them. It has many doom-and-gloom, world-ending predictions but what it’s doing for businesses and what it is allowing businesses now has many benefits for both business and consumers.
Quicker Resolution of Claims
One of the benefits of AI is its ability to ‘make decisions.’ AI is fed data. From this, it can begin to spot patterns and learn. As a result, it can suggest solutions or spot problems (imminent or long-term). It can, in effect, make decisions. This is already being used in medical environments, for instance, to help scientists develop new pharmaceutical drugs and analyze scans for cancer. There have been predictions that, eventually, patients might have appointments conducted by AI.
This prediction isn’t far off what is happening right now in insurance. A problem the insurance industry has, which extends from legacy businesses to start-ups, is the how long it can take for a claim to resolve. AI programmes are beginning to handle insurance claims. They are being shaped to understand the categories and variables within claims based on historical information – be it written reports or images. As a result, the AI can handle new claims. What this does is speed up the whole A-to-B. A customer’s claim can be processed almost immediately – if the hardware and software are to a high-enough standard. Admiral’s Spanish operation is doing this with car insurance claims. If the case needs to, it will be passed onto human hands and eyes to review and finish it off. Often, though, this doesn’t have to happen. Customers can get details of the claim very soon after it is made.
With AI handling a bulk of the manual labour of the claims process, the need for large teams to fulfil workloads is less. Additionally, there are AI chatbots which can answer customer complaints and queries to an increasing satisfaction as their communication skills improve. As such, businesses can keep teams small and to-the-point. What this means is that commercial property can be to an appropriate scale too. All in all, there is less overhead.
Insurance businesses factor in their overhead into their prices, as is only sane. With lower overheads, insurance companies will have cheaper insurance quotes for their customers, while offering the high-standard policies and coverage expected.
There is the added benefit of the security which AI can offer, in two ways which will interest insurance companies.
Number one is for data. Companies of any size – hundreds of employees or only a couple – will have multiple devices which are used to complete tasks. These tasks will either store or have access to sensitive data. AI can process and view security status across these devices better than other options on the market. Additionally, it can spot problems before others, and solve them using solutions which humans wouldn’t be able to think of at speeds which they wouldn’t be able to achieve. AI is like a once-in-a-generation safety in the NFL or rim protector in the NBA or defensive player in soccer; they operate at a different level and make it look easy.
Number two is for anti-fraud. AI will be able to spot trends in certain customer’s data and raise potential red flags for anyone who may look to use insurance fraudulently. Safeguarding the company against any criminal activity.
AI’s doom-and-gloom, though, could complicate the insurance industry as much as it will help it. The biases in programming has been raised as a potential issue in facial recognition and credit or housing schemes, already. These algorithms and AI uses will result in legal claims against them, as is happening. Similarly, the grey-areas surrounding autonomous car legislation could further complicate matters. Businesses will likely be on the receiving end of complaints and charges for any issues that arise as a result of their software or practices and applications of software. Insurance companies will have to draft and create policies as careful and rigorously as they can as the times change.
AI is fulfilling promises in the business world already. As it’s wider application becomes normalised, and its implementation suffers growing pains or raises serious concerns, insurance companies will have to adapt their practices to be able to survive.