3 ways AI can innovate the Insurance Industry

Published by FirstAlign

The Insurance Industry reflects people’s moods, and this year, Corona Virus has checkmated the sector.

Despite starting strong in 2020, the rest of the months took a sad turn. In 2019, premiums increased to +4.4%, the most robust in four years. But with Covid-19 striking us, things have changed. The Global premium income is expected to shrink by -3.8% in 2020 (three times the pace witnessed during the Global Financial Crisis).

Image by Steve Buissinne from Pixabay

Covid-19 has changed our lives in many ways, and it also changes the way we do insurance. The Covid situation has got insurance companies to speed up their digitization and automation processes, which otherwise would have taken years. In this article, we look at three ways AI can innovate the insurance industry.

Inspection

Claim process inspection is the first step taken by the insurer to settle the claim amount accurately.  Insurers are ready to pay the actual amount for your damage, but they have to follow specific rules and regulations to prevent fraud. The first step in doing so is an inspection. Inspection takes time and manual effort, and hence this is one apt area where we can implement AI.

We can create deep learning image recognition models and train them using labeled and augmented datasets. The trained model can be converted to Core ML for use with a mobile app. The Surveyor can use the drone images from the mobile to make decisions. An alternative method is collecting the recordings, uploading, and processing them. We can use an application on a cloud platform as a batch job in the office. A combination of both these methods is preferable.

The use of drone cameras can reduce inspection time and pave the way for better and faster decisions. AI applications yields better results. It benefits the Surveyor and assists the Underwriter in making informed decisions and ultimately helping clients with risk management.

IoT and AI

IoT generates large volumes of data, which is exciting and provides excellent opportunities for the insurance industry. It can give real-time behavioral and contextual customer data that can help develop high-quality dynamic risk profiles.

Combining IoT and AI is a smart move.  Insurance companies can take advantage of IoT capabilities to improve their customer service. Smart home with IoT devices help detect and alert customers on issues at their home and commercial space. By tapping into this data from IoT, AI can provide predictive analysis for insurance companies.

For example, an AI predictive analytical model can predict which customers are vulnerable to leaks by analyzing data from leak detection sensors. With such analysis at hand, insurance companies can proactively alert their customers of the repairs to be done before any untoward incident could lead to claims. The coming together of IoT and AI will lead to sustainable long term growth.

Complete Automation (End to End)

Complete automation is the ultimate goal for every business, but it is also a complicated process. Though the process is complex, we can automate the entire claim process from end to end. It involves automating more straightforward and repetitive tasks along with trained models for real-time inference.

For example, receiving evidence and sharing outcomes can be automated using RPA and other supported application networks.  But the assessment itself will need a specialist. Here, we need advanced AI techniques such as NLP and  Image classification & Object detection to solve the problem.

NLP can be used to automatically and intelligently extract insights from large documents or audio clips. It helps in searching and interpreting texts in the right context. AI Vision can support the claim assessor to make immediate decisions based on the photograph or video clip. Image classification and object detection can speed up the claim process to a great extent.

We need to train the AI model based on guidelines and policy terms. Deep learning techniques help to provide coverage or settlement figures to the claim assessor instantly. A chatbot can provide a simple and straightforward overview of the claim status.

The complete end to end automation is very much possible when automation is targeted in small chunks. Full automation can provide faster, better, and well-informed services. Efficient services that customers would appreciate during dire times.

Conclusion

Insurance companies understand that digitization and automation is the way forward. Investment in AI is no longer an option but a part of ongoing business strategy. The pandemic has only expedited this process.

While the end to end automation is the goal of every process, companies can start implementing AI in smaller areas. Inspection, IoT provides ample opportunities for AI. By beginning with one step at a time, insurance companies can see visible results. Customers get faster turnaround time, factual and correct settlement figures, and better services. Finally, providing better trust between customers and insurance companies, which is the need of the hour. Insurance companies need to innovate with the latest in AI to keep up with the competition.

References

Published by FirstAlign

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