Artificial Intelligence in Insurance
What is insurance
Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools clients' risks to make payments more affordable for the insured.
Typical Business process in Insurance:
How can we use artificial intelligence in the above process?
In traditional approaches Customer contacts, the agent to take an insurance. Agent will collect the information and enters into the system to generate the Quote. If the customer is interested and good with the coverage's and premium given by the agent, he may choose to take the policy with the organization.
Using AI, the process can be changed completely. Online driven Quote system which is intelligent enough to rate the quote accurately with minimum data inputs from the Customer.
In this digital era customers are providing lots of information through various channels. We should use the data to assess behavior which required for insurance.
Example: Lemonade which provides renter insurance has used artificial intelligence to provided instant policy creation and quick claim settlements.
Underwriting plays a major role in going through numerous unstructured information and documents to decide the risk factors in the policy. Artificial intelligence can be used to convert the unstructured information or documents to useful information for underwriters to make decisions. system can be built which process the information and provides the suggestions automatically. This would save lot of time in underwriting and reduces the policy processing time.
Example : Knowing customers is important to insurance companies so that they can choose the right insured who can have less claims.
FitSense helps healthcare and insurance organizations to use the data to know accurate health information that allows him to target new customers and reduce claims. Knowing the customer also helps the insurance organizations to personalize the product offering which would delight the customers.
Currently claim processing takes average time of 15 days to 30 days from the FNOL (First notice of loss) to till the claim settlement. With advanced algorithms, insurance claims can be largely automated, enabling insurers to achieve efficiency, accuracy, reducing processing times from days to hours or minutes. Artificial intelligence can be used to detect the fraudulent claims by using the complex algorithms which are time consuming to run through humans.
Example : Girish Nayak Chief of Customer Service, Operations and Technology, said the below points how they are using AI in Auto & Health fraudulent claims detection.
“We use machine learning to figure out when the surveyor is assessing motor claims to see which parts are outliers. Auto parts are priced differently across the country, but in case some garage charges very high, the algorithm can throw it up. It shows anything which is five per cent too high or too low as an outlier”
Similarly, in the case of medical claims, the insurer is using machine learning AI to check if a hospital may be sending claims for a particular illness at a particular price.
“In such cases, you know there is something wrong and you send someone to check it. This can increase efficiency and help detect frauds better,” Nayak said.
AI also helps organization to reduce the churn percentage, provide virtual assistance, Enhanced Customer experience etc
Image sourced from : https://www.acko.com/articles/general-info/impact-of-artificial-intelligence-on-the-insurance-industry/
Lemonade information is soured from : https://www.lemonade.com/ website
Fitsense information is soured from : https://www.fitsense.io/ web site