How AI is transforming the insurance industry [Infographic]

As the insurance industry becomes more digitized, traditional companies and smaller startups alike are searching for ways to improve their businesses. The rise of artificial intelligence (AI) has emerged as one of the most important tools for doing just that. After all, AI can help insurance companies make sense of large amounts of data, streamline operations, and provide insights to offer better products. Jump to the infographic for some highlights on how insurance companies are using AI in action or keep reading to learn more. 

What is AI?

Artificial intelligence replaces tasks that normally require human intelligence with computerized systems. Two more concepts emerged as these technologies advanced: machine learning and deep learning. 

• Machine learning is a subset of AI in which computers are trained to analyze data sets to find patterns or predict outcomes. They improve as they’re exposed to more data sets over time. 
• Deep learning is a subset of machine learning that can analyze vast data sets and train itself to perform a task. Unlike machine learning, deep learning technologies do not need to be externally trained.

As a whole, these technologies have given companies a better understanding of consumers’ needs by analyzing data. When combined with other tools like computer vision and natural language processing, AI solutions can provide faster, smarter, and customized products. 

Other types of technologies behind AI include:

• Computer vision is how computers analyze and make sense of digital images. One example is Facebook’s ability to recognize faces in photos and predict users’ identities.
• Natural language processing is how computers understand human languages and speech. Siri and chatbots both utilize natural language processing. 

Automated speech recognition is how computers analyze sounds to turn them into words. Speech-to-text systems are one example. 

Ways AI can impact the insurance sector

AI has the potential to impact all areas of the insurance industry. Investing in and integrating AI solutions is critical to maximizing business efficiency, reducing risk, and improving the customer experience. 

Fraud prevention

The FBI reports the cost of non-health insurance fraud totals nearly $40 billion per year, so you can bet that companies take fraudulent claims seriously. AI-powered solutions can spot unusual patterns and comb through massive amounts of data to identify potential fraud. These technologies can improve over time, evolving to identify new threats. 

Faster claims processing 

As it stands, the claims process is very manual and time-consuming. Chatbots and other natural language processing technologies can cut down on some of the administrative tasks, possibly with more accurate results too. Smartphone cameras are another AI tool that can assess damages to help speed up the claims process. 

Customized solutions 

Consumers now have the ability to build insurance policies to fit their needs rather than selecting a one-size-fits-all policy. Usage-based car insurance plans are one example of how companies are tailoring their products to give users what they need. In these plans, drivers use telematics devices (either through an app on their phone or a device) to share data on their driving behavior and tendencies with insurance companies. In return, this allows companies to more accurately price their premium. 

Operational optimization 

All businesses aim to cut down on unnecessary workload to make them more efficient. That’s why many companies use chatbots and natural language processing to field customer requests online and over the phone to reduce administrative tasks. AI has the ability to streamline internal operations, allowing workers and time to be allocated to more valuable tasks. 

Improved customer experience

Users want reliable, easy-to-access service. Chatbots and smartphone apps are two common examples of how companies are making themselves more accessible through automation and connectivity. With these technologies, users can log on at any time of day from any location to get in touch with an agent or start the claims process. In return, these tools help reduce costs for the company and lead to faster processing. 

Infographic

Digital transformation is already reshaping how insurance companies do business. As AI and other technology trends emerge, large companies and startups will need to keep up. From smart home devices to chatbot service representatives, technology can improve our quality of life via increased flexibility, security, and convenience. When it comes to buying car insurance, turn to the nation’s leading insurance comparison site to find the best rates.

Sources

Milken Institute | McKinsey | Accenture 1, 2, 3 | TechCrunch | PWC