How the Insurance Industry is Leveraging AI

1
How the Insurance industry is leveraging AI
Insurance is one of the most critical industries
there is it is what saves people and
organizations from falling into financial
trouble after a crisis or an unforeseen event.
However, it is often deemed as the least
innovative industry with outdated processes,
time-taking procedures and delays, legacy IT
systems, and many dissatisfied and even
disgruntled customers.
With the change in demographics and a rapidly
growing population of millennials who are tech-
savvy and like to perform their banking and
finance-related transactions online, it has also
become indispensable for every organization in
the banking and finance sector to cater to their
needs. Evidence has it that millennials are more
likely to purchase insurance online if the time
and hassle costs are lower, unlike the
middle-aged and older demographic that prefers
purchasing insurance after meeting and
discussing options with an insurer. So, the
insurance industry is slowly and steadily
working its way out of this reputation of being
technologically outdated and of providing
inconsistent and friction-filled customer
experiences. How Through a digital
transformation lead by Artificial Intelligence
(AI) and Machine Learning (ML). To effectively
understand how technology and AI have disrupted
and revolutionized the insurance industry, we
must first look at how the industry is leveraging
AI. How is AI used in the insurance industry?
Risk evaluation The core of the insurance
industry is risk, and its effective
evaluation/assessment. Using AI and ML, insurers
can leverage the data deluge to assess risks
with higher accuracy, understand new correlations
and patterns, get more in-depth insights, make
better predictions, and accordingly, customize
their plans and adjust their premiums. For
instance through AI and ML, if the firm finds
that a particular group of policyholders are at a
higher risk of actually facing a fire accident,
then the firm can adjust the premium
accordingly. Underwriting Conversational AI
Platform for reinsurers and underwriters to
effectively, and seamlessly perform their tasks,
AI efficiently gathers data from different
internal and external sources and provides deep
and intelligent insights. By taking control of
the data deluge and leveraging it, such
insurance executives can move from the
detect-and-repair mindset to a
predict-and-prevent philosophy, reduce guesswork
in insurance, make accurate, data-driven
decisions and develop a competitive edge for the
organization.
2
How the Insurance industry is leveraging AI
247 assistance to insurance shoppers AI in the
form of conversational ai bots in insurance are
capable of handling much larger volumes of
insurance shoppers. They effectively and
efficiently handle large volumes of queries,
provide automated advisory and personalized
recommendations to clients through multi-turn,
natural, and goal-oriented conversations. Conversa
tional bots, thereby, enable organizations to
automate the query management process to a great
extent. So, the human agents can be free from the
drudgery and sheer monotony of handling regular
inquiries and step in when required to customize,
convince, and convert shoppers. Such automated
advisory saves the time to give a quotation to
the client, enabling them to make quick,
data-driven insurance shopping decisions. Increas
e conversions by human agents with chatbots as
live agent assistants It is impossible for
human agents to effectively and productively
handle large volumes of data on a daily basis
and make conversions and up sell products.
Chatbots who have ML capabilities can be
programmed and taught to act as live sales
assistants to agents. The chatbots collect,
collate, and analyze voluminous data from
various sources, making key insights available to
the policy agents while they are making pitches
to the potential clients. These conversational
bots make relevant information and high-quality
insights available to human agents in a timely
fashion and recommend the right products based
on the clients profile. This way, the human
agents not only convert clients but also up sell
and cross-sell the right products and increase
the lifetime value of the client. On boarding
assistant It is a long and cumbersome process
from preparing and giving quotes to clients,
getting them to choose a policy, and prepare the
policy papers to make them pay and onboard
themselves on the policy. Known as the
quote-to-cash (QTC) process, the time and hassle
costs to the human agents from this process
contribute to their lower sales figures and
inability to generate adequate additional
revenue. With the help of conversational bots
that can be programmed and taught to act as on
boarding assistants, it is possible to automate a
significant part of the process, reduce the time
and effort required and enable human agents to
focus on converting new clients. These on
boarding assistants can solve any queries that
clients have, help them find in-network
physicians/ hospitals, understand the plan
coverage, etc. Claims management Filing for
claims and getting it is often an exhausting and
emotional task that is high on time and hassle
costs because clients file for claims after a
major event like an accident or natural calamity
or illness/ death of a family member. Like with
personalized assistance to policy shoppers,
conversational bots automate to handle voluminous
calls in the claims process, which very often
involves repetitive questions. Human agents can
step in when required and use the full
conversation history to handle more complex
questions and issues. With AI chatbots, the
claim adjudication time is reduced, and the fraud
detection percentage has increased. High-quality
and consistent customer experiences Dynamic and
meaningful conversations in natural language
through conversational bots have enabled
insurance organizations to provide high-quality,
seamless, and consistent customer experiences by
lessening the wait time and frustration levels
of the clients. They have enabled clients to
engage in self-service, understand insurance
jargon better, and un complicate the claims
process. For instance, the provisions for
3
How the Insurance industry is leveraging AI
car insurance customers to file for claims
through the mobile app by clicking pictures and
submitting the claim instantly has helped reduce
the time, money, and hassle costs for the
clients. The impact of Conversational AI in the
insurance industry
As mentioned earlier, the digital transformation
and AI adoption in the insurance industry is slow
yet steady. In some respects, such as using
chatbots for on boarding assistance and
personalized sales assistance, many players have
already adopted or are adopting AI technology,
while in other respects, there is yet to be
full-fledged AI adoption. In the coming years,
the insurance industry as a whole will benefit
from the operationalizing AI. At SmartBots, we
help organizations adopt Conversational AI
(chatbots/virtual assistants) to improve
employee productivity and provide great customer
experience. Reach out to me at stallin at
smartbots.ai to explore more on Conversational AI.