5 Ways AI/ML is Transforming Insurance
By Neelesh Kripalani, Chief Technology Officer, Clover Infotech.
With technology taking centre stage, industries and sectors are getting disrupted. Insurance is no exception, and its key functions are being reimagined with the power of digital technologies such as artificial intelligence(AI) and machine learning(ML). From prospect management, to lead management, and from underwriting to claims and renewals, these technologies are making their presence felt across the entire Insurance chain.
Let’s look at a few disruptive, yet welcome changes that these technologies are bringing about.
With data about each customer being available literally at their fingertips, analysing claims history and related behaviour has become a seamless experience. This has empowered insurers to compute the payouts much faster and in a more informed manner. As a result, the time taken to make payout have reduced drastically – much to the delight of the people who avail insurance. This has also enabled to reduce costs related to claims processing and payouts, which add immense value to the overall efficiency of operations and profits. Insurance companies are leveraging technologies such as Optical Character Recognition (OCR) and training their systems in AI data, scenarios and cases. This has enabled them to inspect damage for claims digitally, collect relevant data to assess decisions on repair, replacements etc. and the related costs and ensure that the value of the claim is true and correct.
AI and ML have enabled Insurance companies to create a robust system backed with relevant data to assess risk and for underwriting. A data and AI-backed underwriting model will enable them to cover and mitigate their risks across all types of insurance – be it health, vehicle, or insurance for factories/ company warehouses, etc.
With Chatbots becoming one of the most popular ways in which brands engage with their customers, the insurance industry cannot be left far behind. Chatbots can be deployed to take care of lead management, claims management, customer service etc. The digital engagement via chatbots is gaining industry momentum. AI- enabled chatbots can also enable product discovery by conversing with the customers and helping them arrive at the perfect product as per their insurance needs. Chatbots can also enable channels such as agents, bancassurance etc. to connect with the insurance company and seamlessly resolve ambiguities and issues.
Product Innovation: With AI and ML powering them, insurers are now able to analyse customer’s behaviour patterns better and devise products and incentives accordingly. For example: With Telematics, good driving behaviour with adherence to speed limits can positively impact the premiums. With wearable technology, insurers today can also track and incentivise healthy habits when it comes to their health insurance plans.
Early Warnings and Fraud Alerts: The power of AI and ML with humungous volumes of structed and unstructured data helps insurers to identify potential fraudulent claims.Such AI-powered systems used by insurers can sieve through all documents submitted towards the claim, detect anomalies, and raise triggers and alerts for the insurance company to act in time.
The power of AI and ML is disrupting many industries. Insurance, which is a very underpenetrated sector in India, will richly benefit from implementing such technologies to broaden reach, administer services faster, and create a robust business model.