How Artificial Intelligence Will Impact The Insurance Industry
Source – forbes.com
If you’re like most people, calling an insurance company isn’t among your favorite activities. That’s because the insurance industry is one of the least innovative areas for customer experience, meaning that customers typically come away from their interactions disappointed and dissatisfied. However, things are definitely changing, and artificial intelligence is playing a large role. The fast-growing technology has the potential to disrupt the entire industry and greatly improve the insurance customer experience.
Artificial Intelligence In The Claims Process
The insurance agency is notorious for its outdated processes. Filing a claim often looks the same today as it did decades ago because the industry isn’t consistently leveraging new technologies that are available to them. If an employee is busy or on vacation, a claims request could sit still until the right person is back. The outdated processes make it harder for agents by increasing the workload and forcing them to work with antiquated systems and frustrated customers.
However, AI can be applied to improve the claims process. Claims currently are touched by multiple employees. However, a new process of “touchless” claims doesn’t require any human intervention. This process uses artificial intelligence and other technology to report the claim, capture damage, audit the system, and communicate with the customer. The potential here is huge, as the process could allow clients the chance to file claims without having to wade through red tape.
Companies that have already automated some aspects of their claims process have seen a significant reduction in processing times and quality. AI-powered claims could also fight against one of the most costly elements of the insurance industry: fraudulent claims, which cost the industry more than $40 billion a year. Instead of relying on humans to manually comb through reports to catch inaccurate claims, AI algorithms can identify patterns in the data and recognize when something is fraudulent.
Future Of AI And Insurance
The industry is definitely ripe for AI disruption. Customers expect to be able to interact with companies through modern technology; a recent survey found that 74% of consumers say they would be happy to get computer-generated insurance advice.
Many insurance companies are already using artificial intelligence to some degree, and the number of companies following in their footsteps is sure to increase dramatically over the coming years. Artificial Intelligence has never been less expensive or more accessible, which means most companies don’t have a reason not to adopt it in at least some form.
Chatbots work through messaging apps many customers already have on their phones, which makes them a natural next step in customer interaction. In order to truly be effective, chatbots must have natural language processing and sentiment analysis so they can understand what customers are really asking. Effective chatbots can process concerns that are either typed or spoken from customers and provide personalized service. In the insurance space, chatbots can be used to answer basic questions and resolve claims, as well as sell products, address leads, or make sure customers are properly covered by their insurance.
Marketing And Underwriting
Insurance is a competitive market, so a strong marketing strategy is vital. Traditionally, insurance companies used blanket methods like cold calling customers, but today’s customers expect personalized sales tactics. AI can pull in customer data to create a full profile that can be used to offer only relevant insurance products and remember a customer’s preferences.
Instead of spending valuable time and money on the underwriting process, which typically includes invasive questions and surveys about to dictate premiums, Artificial Intelligence could automate the entire process. Bots could potentially scan a customer’s social profile to gather information and find trends and patterns. For example, someone who has a healthy lifestyle and a steady job may be able to be connected to being a safer driver, which could lower insurance premiums. AI can analyze data better than humans to more accurately predict each customer’s risk, thereby providing customers with the right amount of insurance and companies with protection from risky customers.
Insurance is driven by data, and it has a huge effect on the company’s bottom line and the satisfaction of the customer. A recent study found that nearly 80% of insurance executives believe artificial intelligence will revolutionize the way insurers gain information from their customers, with more than half saying the biggest benefit is being able to leverage better data for improved insights into the customers.
Telematics, or wireless communication of data back to an organization, is expected to be a huge area of growth for insurance. Many insurance companies already offer discounts to customers who transmit their driving data back to the company. Telematics and artificial intelligence can take this one step further by recognizing GPS patterns with the data, inferring road and traffic conditions, and even predicting and helping avoid accidents, which could potentially lead to fewer claims to process and safer and more satisfied customers.
The insurance industry has long been bogged down by outdated practices. However, the combination of a new wave of thinking and newly developed artificial intelligence technology has the potential to completely change the customer experience to provide great service in a way that resonates with modern customers.