By Shailendra Tewari
The insurance industry is crucial to the global economy, providing protection and financial security to individuals and businesses. However, the sector is facing major problems like rising expenses, shifting consumer expectations, and escalating competition. Thus, insurance companies are using artificial intelligence (AI) technologies to address these issues. In light of this, the industry is changing in many ways due to artificial intelligence, as it is giving insurers new tools to boost productivity, save costs, and improve customer satisfaction. Furthermore, automating routine processes, analyzing data, and fraud detection becomes possible through the deployment of AI technology, which allows insurers to concentrate on more intricate and valuable endeavours. Hence, AI can now offer more individualized plans and premiums based on individual risk variables and previous data.
Despite the challenges the industry possesses, there are various advantages of AI to overlook. In this regard, organizations that adopt AI technology and use it to their benefit can better position themselves to satisfy changing client needs, acquire a competitive edge in the market, and sustain long-term profitability. With AI playing a critical role in fostering innovation and growth, the insurance sector is becoming more data-driven and customer-focused. As a result, insurance businesses must utilize AI to boost productivity, cut expenses, and improve customer experience.
Here’s a look at how AI is transforming the insurance industry-
Image recognition is a subset of AI that teaches computers to interpret and recognize images. It is being utilized in the insurance sector to speed up certain tasks, such as fraud detection, personalized service, video surveillance, interactive marketing, among others. Traditionally, insurance adjusters had to manually study and assess photos to ascertain the level of damage or loss. However, the process has become much quicker and more precise using AI-powered picture identification. It can scan and analyze pictures of damaged goods or cars, providing an immediate estimate of the cost of repairs and speeding up the claims processing procedure.
Another area where AI is revolutionizing the insurance industry is through voice recognition. Insurance businesses have started using voice recognition technology, which has advanced significantly in recent years, to enhance the client experience. For instance, different voice assistants are used by insurance companies to let customers manage their insurance policies using voice commands. Voice recognition allows for smoother and more efficient responses to client inquiries, as well as more appropriate rerouting and providing of information regarding prices, claims, statuses, and other customer information, enhancing customer engagement as well as satisfaction. Thanks to AI technology, the workload of customer support agents has decreased, and the customer experience is smoother.
One of the biggest challenges for insurance companies is making their apps more user-friendly. Customers often experience frustration and low engagement when using complicated insurance apps. As a result, in order to fulfil the changing demands of consumers, various insurance firms are evolving with ongoing trends and are reworking on their app interfaces to make it more user-friendly. Hence, customers will find it simpler to rapidly find the information they require thanks to the redesigned app interfaces, which also stimulate conversation. In addition, customers are more inclined to use and interact with the app frequently because of the chat-like interface’s familiarity with the general public.
Besides the areas mentioned above, AI is changing the insurance industry in a number of other ways as well. For instance, the need for customers to wait on hold for a customer service professional is reduced by using AI-powered chatbots to offer immediate customer assistance and support. Based on unique risk characteristics, AI also customizes insurance policies and rates. Insurance providers may better understand their consumers and create tailored insurance plans that meet their needs by collecting data from social media.
Both the healthcare and insurance sectors are plagued by fraud on a regular basis, including false or duplicate claims, invoicing for unnecessary medical testing, and fraudulent social security numbers. By leveraging anomaly detection with more advanced tools, AI and ML have demonstrated their effectiveness in detecting fraud in this situation. For instance, AI can analyze medical records and detect inconsistencies in information, leading to a more accurate and efficient fraud detection process.
AI is transforming the insurance industry in many ways, from improving the claims process to enhancing customer experience. As AI technology continues to evolve, we can expect significant changes in the insurance industry in the coming years. Although implementing AI has drawbacks, such as the requirement for data privacy and security, the advantages of AI in the insurance sector are too worth overlooking. Protecting data privacy and security is a difficult task. For the past ten years, data has driven the most significant and rewarding technological achievements. Today, however, it is challenging to secure the privacy and preferences of customer data. Security experts must categorize data according to the risk and ensure it is safeguarded with the right security technologies and techniques. Moreover, insurance businesses that embrace AI and use it to their advantage will have a competitive advantage in the market and will be better able to satisfy the evolving needs of their consumers.
The author is CTO, Gramcover