Tech

How AI Is Transforming the Insurance Industry

Artificial intelligence has always been the subject of dreams of the distant future of humanity. Although we are far from introducing a conscious robotic system, AI technologies are showing huge advances in different spheres of our lives. We often use them without even noticing whether it’s the virtual personal assistants on mobile phones (such as Siri, Google Now, and Cortana), self-driving cars, or classic textbook examples like spam filtering systems and marketplaces such as Amazon.

This success is facilitated by the huge amounts of data that we have today. Data is available in abundance, especially in the insurance industry, which has led to another recent development of big data architectures and methods that include various stages such as data collection, cleaning, consolidation, storage, and analytics. Finally, it allows for building the AI insurance company.

AI introduction to the insurance sphere 

It is really beneficial for insurance providers to introduce the latest AI solutions and machine learning. Many approaches have been successful in tackling problems of high pricing, handling claims, and detecting fraud among others. Below, we will explain some areas where AI can help address these challenges. We have tried to break it down into sections based on the main ​​focus.

  1. Claims management and scam prevention

Using AI capabilities and processing large amounts of files in a short time, professionals could automate many tasks and, for example, accelerate certain applications to decrease the average processing time and prices while investing in the user experience. Algorithms can also reliably detect patterns in data and thus help recognize fraudulent claims. Through their self-learning abilities, AI systems can adapt to new unknown cases and improve over time. Besides, machine-learning algorithms may automatically evaluate damage severity and predict repair prices based on historical data, sensors, and images. 

  1. Underwriting and loss prevention

Automated underwriting can greatly speed up the process and eliminate costly tests by pooling multiple data sources. Insurance usually comes into the game after the damage has been done. Instead of paying for treatments that are costly to the company and harmful to the health of the patient, it would be worthwhile to invest in the prevention and early detection of diseases and risks. In this way, it is possible to analyze data that has been used in advance to assess risks to then reduce the likelihood of damage to the insured person and, in turn, to the insurer.

  1. Chatbots

Currently, the most frequently used applications are messaging apps and therefore this seems to be the most direct and comfortable way to interact with the customer using online chatbots. Original language processing is needed to automatically detect user problems and wishes, as well as to provide a personalized solution. Answering consumer questions, handling complaints and claims is not limited by their functionality. Chatbots can also offer customized products and services by analyzing clients’ intentions.

  1. Telematics

Telematics is one area that is predicted to have a considerable impact on the whole sphere. For the car insurance industry, carriers already offer black box fares, providing discounts based on the driving frequency, mileage, or driving style. However, in the future, we will additionally be able to recognize patterns in GPS data, regarding road and traffic conditions and in turn even help avoid accidents, which improves customer satisfaction and reduces claims.

  1. General machine learning frameworks, platforms, and libraries

There are many common-purpose machine learning providers and cloud solution providers with the appropriate AI capabilities that are very attractive, especially if you are already running infrastructure given the huge amount of data. For example, Microsoft has extended its Azure cloud computing and storage platform with a machine learning service. 

Conclusion

As we can see, there are many questions to answer in the insurance business, and AI can find solutions to many of them. It provides us with the tools so that we can solve these problems by really understanding the data we collect. In recent years, AI has led the industry to the next stage of development. Besides, there are some AI companies specializing in providing AI services and creating customized AI products for the insurance business. Use them to accelerate your business growth, and ensure the efficiency of your digital solutions.

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