There is probably no larger industry ripe for the disruption brought on by Artificial Intelligence (AI), than the insurance industry. The need to drive efficiencies through automated operations, smarter pricing, and more effective claims management has accelerated due to the introduction of digital natives who are also improving competitiveness through higher service levels and customer satisfaction. As a result, having an AI strategy can mean the difference for incumbents between surviving and thriving.
By this time every insurance industry executive knows about the potential of AI and its Deep Learning (DL) and Machine Learning (ML) elements. But few have the teams in place to rapidly assess and implement the specific opportunities for their organization. These are critical days and months. Speed and accuracy in the next 12 months may very well have a significant impact on the next decade of business.
Where will you first focus your time and resources to begin gaining your competitive AI advantage?
You have three key priorities: saving time, saving money, and improved service.
Saving time (yours and that of your customers)
Where are your most manual, human-intensive tasks concentrated? The NAIC reports1 that AI is currently being used to speed claims processing, underwriting, and fraud detection. The power of AI is directly linked to the amount of data available. The massive expansion in data from a world connected through the Internet of Things (IoT) and secured data sharing is powering significant disruption across industries, including insurance. Data is driving a faster experience with hyper-automation reducing the need for insurers and the customer in the underwriting and purchase experience. Our connected, highly-censored, personal, and industrial environments are generating petabytes of information derived from individual and industrial inputs. AI algorithms built to create risk profiles from that data can reduce cycle times across the purchase process for auto, commercial, and life policies. Soon, every type of customer will learn to expect near-instantaneous, customized coverage, according to McKinsey2.
Faster, more intelligent, and accurate processes for claims assessment, customer pricing, and reduced fraudulent claims will generate savings on both the business and customer side. AI processes can eliminate and streamline contract processing and payment verification, lowering the customer acquisition costs for commercial and personal insurers. For example, AI-based algorithms can process massive amounts of aggregated data, instantly balancing competitive affordability with profitability.
As AI drives parity in pricing, profitability, and process, the key differentiator most likely to generate long-term value and brand loyalty is service level. People now expect a high degree of self-service and mass customization. The contract-driven nature of insurance has thus far relied on a significant amount of person-to-person interaction in the underwriting and processing systems. With the growing application and benefits of AI in improving document processing, and speeding applications and claims through the provision of smarter chatbots, insurers can expect increased customer satisfaction. Repurposing of human resources can also create greater levels of customer service and satisfaction as resources are shifted to higher-value customer interactions like complex claims resolution.
Where to start?
So which area of focus would generate the most immediate and meaningful advantage for your company? The pressure is on to decide with the pace of innovation increasing. Insurance is just one of the long list of industries in the midst of massive disruption from AI. As individual companies wrestle with planning and pivoting, choosing the best innovation partner has never been more important. Prioritization is a multi-departmental exercise that needn’t be a slow one.
The necessities of time, resources, and quality also make it more important than ever to make the best choice for the organization, its customers, and shareholders. To help organizations capitalize on the opportunities presented through disruptive changes, Originate focuses on the automation of customer experience or “Experience Automation”. We bring the product and AI experts needed to give ideas life and bring new digital products to market— from concept to commercialization, and commercialization to growth.
- NAIC.org, ARTIFICIAL INTELLIGENCE, Last Updated 10/30/2020
- McKinsey & Co., AI on the future of insurance, March 12, 2021 | Article