The Role of AI in Insurance Evolution

AI based testing

Artificial Intelligence (AI) has disrupted multiple industries and the insurance sector is not lagging much in leveraging AI to enhance accuracy and efficiency. As AI is evolving with its umbrella technologies including Natural Language Processing (NLP), Deep Learning, Machine Learning (ML), and Convolutional Neural Networks among others, the changes are being manifested in the business-critical operations of every sector.

AI is poised to replace the “detect and repair” approach of insurance providers with more advanced and capable “predict and mitigate” methodology. This massive transformation supported by AI based testing can open multiple use cases for AI to disrupt the insurance sector. As per a McKinsey report, the expected investment in AI from the insurance sectors is expected to surpass USD 1.1 trillion.

Embedding AI into the insurance process can help insurance businesses in multiple ways by bringing more productivity, efficient claim management, better customer experience, and lesser frauds among others.

Let us take a deeper look into how AI is transforming the insurance sector rapidly.

  1. Claims Reporting: First Notice of Loss (FNOL)

Advanced AI algorithms can insurers report, triage, route, and assign claims without any human intervention. Digital assistants with NLP and automatic speech recognition capabilities can efficiently and accurately handle the First Notice of Loss (FNOL) insurance reporting process. It can help in creating a lean process and enhancing the efficiency of the overall system.

Insurance companies can also leverage conversational AI to avail multiple benefits. Chatbots can help in efficiently facilitating the claim reporting process. Insurance customers can leverage the chatbot to report any incident from anywhere and at any point in time. The AI-enabled chatbots can process and distribute the information to concerned point of contacts to ensure faster claim processing.

  1. Improved Loss Estimation for Low Claims Leakage

Poor loss estimation and claims leakage are some of the biggest pain points of the insurance industry. Human errors and bias can lead to huge losses. AI-backed deep learning algorithms and image recognition techniques can help insurance companies plug these gaps. Machine learning can enable insurers to assess or predict the amount of damage based on relevant pictures of the damaged object.

Leveraging AI to estimate loss can help in ensuring accurate claim settlement. The AI system can also recommend relevant parts the need to be replaced to calculate correct estimate. This can help in making the loss estimation process quicker, more accurate, and more efficient.

and more efficient

AI helps Insurance providers with seamless integrations and improves performance

  1. Better Insurance Claims Management and Investigation

AI can help insurance companies to streamline insurance claim assessment and settlement process. The entire process can be regulated from claim creation, data capturing, authorization, approvals, payment or recovery tracking.

It can be paired with other apps including fraud detection to build a data-driven, automated, and streamlines claim processing system with end-to-end automation sans any human bias or error. Adopting AI can also help insurance companies to remove any favoritism and fraud claim settlement from the system.

  1. Fraud Detection and Prevention

Frauds have made insurance industry lose around USD 40 billion every year. However, this gigantic figure is limited to the USA only. Hence, the problem of insurance fraud is massive at a global level. Insurance providers need new-age technologies to detect and prevent fraud more effectively to plug huge losses and improve their bottom-line.

AI can help in churning out actionable insights by studying historical big data of customers and help in detecting potential frauds at an early state. Image detection techniques and ML can also help in detecting fraudulent activities and preventing huge losses to insurance companies.

  1. Routine Operations

AI-enabled chatbots have already been around in the customer service space and have proven their usability and efficiency. Likewise, in the insurance domain, chatbots can help in offering services at scale without spending too much on human resources for business-critical processes. Chatbots can also be leveraged to upsell, or cross-sell insurance products based on customer history and profile. In a nutshell, AI can enable insurance companies to offer customer services at scale, cost-efficiently and without any human error.

How can quality engineering help insurance companies leverage AI efficiently?

Quality has become business-critical for all industries. Delivering flawless customer experience while safeguarding one’s business interests is essential to stay ahead of the market. Insurance companies need to leverage a reliable and experienced quality engineering (QE) company that can help in ensuring flawless implementation of complex technologies and applications including AI.

Robust insurance application testing can help insurers deliver scalable, secure, and customer friendly solutions to clients. QE companies with AI capabilities can also help in validating AI models and assist in ensuring that the deployed applications are working as per the business needs.

Wrapping Up

AI can bring in more accuracy and efficiency within the insurance system. It can help in standardizing the overall insurance and claim settlement process with lesser human intervention. Artificial intelligence can also bring operation efficiency, lower costs, and better customer experience. Insurance companies leveraging AI can also become more responsive to customer needs and more proactive towards insurance frauds.

You May Also Like

About the Author: John Lucas