BY RAJEEV SHRIVASTAVA
While the term artificial intelligence might conjure up images of sci-fi movies for many, it’s quietly responsible for many practical functions in the insurance industry. Artificial Intelligence—otherwise known as AI—is defined as intelligence that utilizes machines, computers, and datasets to problem solve, as opposed to utilizing the natural intelligence displayed in humans or animals.
Companies are deploying AI to make precise decisions based on large volumes of data–often petabytes–at speeds that most humans can’t match. When optimized, AI can automate functions that help organizations make informed business decisions for competitive advantage which best serves their businesses and customers.
For example, popular apps like Google Maps or Waze are examples of AI, since they rely on machine learning to identify changes in traffic flow so they can recommend a route that avoids congestion. Similarly, the future of the insurance industry will utilize machine learning and advanced technologies to enhance productivity, adapt to customers’ needs, and ultimately optimize the customer experience.
How AI is Implemented in the Insurance Industry
As AI technology evolves, the insurance industry is looking to lever-age its capabilities in order to provide better and more relevant services to its customers. According to McKinsey & Company, insurers accelerated the adoption of AI significantly during the pandemic. Since social distancing made it more difficult to conduct face-to-face business interactions, a number of insurance carriers noted that moving to a digital interface was crucial to not only maintain business but to deliver an exceptional customer experience. On the other hand, the businesses that relied on traditional practices of sales and business were left behind.
But, how exactly is AI being implemented in the insurance industry?
Delivers Individualized Sales Processes
Since AI requires no in-person involvement, AI can streamline and expedite the insurance policy purchas-ing process. Just as the machine learn-ing behind Google Maps understands where you want to go and creates a customized route to get you there, ma-chine learning in the insurance industry means that a customer’s profile will be used to create an individualized sales experience. Computers use algorithms to gather information and data about a user in order to offer auto, commercial, travel or life insurance policies that best meet a customer’s specific needs.
Offers a Wide Breadth of Policies
Whereas humans are limited by the amount of information a human brain can retain, machines don’t have those same limitations. Considering how insurance companies have a vast array of options and plans in the market-place, this puts AI at a huge advantage. Insurers can feed any number of plans and terms into an AI algorithm, and trust that it will synthesize any changes related to COVID-19, new guidelines, government regulations, etc.
Limits Subjectivity During the Claims Process
If humans are responsible for deciding the fate of insurance claims, then there is always an element of subjectivity. On the contrary, creating environments where computers are responsible for sifting through data and making predictions helps decrease fraud and limit subjectivity during the claims process.
The more that AI learns about customers’ needs, the more it’s able to automate tasks such as answering common questions, providing quotes, and sending customers’ insurance policies and cards. These time-saving advantages free up resources so com-panies can focus on business development.
Provides 24/7 Customer Service
Throughout the pandemic, AI smart-bots have become critically important to providing around-the-clock customer service in the insurance industry, especially for health insurance and travel insurance. The machine learning aspect of these bots means that they can “get smarter” with every customer interaction. As their knowledge base grows, AI smartbots use their data to guide desired outcomes without the need for live customer representatives. Customers can benefit from being able to access important information, anywhere, at any time.
How will AI Impact Your Business?
Truth be told, it’s not a matter of “if” AI will impact your business; it’s a matter of when. Humans are becoming more dependent on their devices to simplify everyday tasks, and the advancement of algorithms and machine learning means that companies can use data to better understand their customers and to provide an overall better customer experience.
For the insurance industry, AI is being used to tailor policy options and present users with a customized purchase process. As AI becomes more advanced, insurance companies will be able to synthesize data at scale and provide customers with human-like interactions, while freeing up company resources.
Although the potential for advancement is limitless, you shouldn’t feel threatened or scared about technology taking over. Instead, be part of the change. Stay informed and stay prepared. Welcome these changes with open arms. The brokerages and agents that will fare the best are the ones who seek to understand AI so that they can take advantage of the technology. Those that choose to work with AI instead of against it will stay relevant, competitive, and ready to tackle the ever-evolving digital economy.
RAJEEV SHRIVASTAVA is CEO of Visitor’s Coverage, an insurtech company revolutionizing
the way travelers search for, compare, purchase and manage their travel insurance. Find out more at visitorscoverage.com.