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How AI Is Changing the Insurance Industry
Artificial intelligence is on the rise, and it’s transforming many industries from the ground up. This revolutionary technology is helping professionals in various fields provide a more efficient, effective, and personalized service than ever.
The insurance industry is no different. In fact, it’s one of the earliest and most eager adopters of AI. Insurance depends on accurate data and rule-based processes, which is why AI can improve almost every aspect of it.
Its machine-learning and language-processing abilities make it a wonderful tool that can help insurance companies raise their standards and live up to them gloriously. Here’s how AI is transforming the insurance industry.
It Streamlines Processes
Before AI, numerous tiresome and repetitive tasks in insurance had to be done manually. Not only was this time-consuming and labor-intensive, but it required a great deal of mental focus and skill from individual agents.
However, AI insurance solutions can manage the entire customer journey with minimal human interference, from providing customized quotes and onboarding to helping customers through the entire claims process.
Powerful AI-based digital assistants with access to the insurance company system can cater to many customers at once, and they require moments to process and cross-reference different data points. They can process documents and payments, make policy adjustments, and much more.
When done by people, these processes can take time and become extremely convoluted, therefore resulting in unsatisfied customers and wasted resources.
It Eliminates Mistakes
Not only do AI-based solutions make insurance processes leaner and more efficient, but they eliminate the possibility of human error. Claims processing is complicated, and it requires going through numerous documents, comparing data, doing calculations, and much more. It’s easy to get lost along the way and make mistakes.
However, AI is incapable of making such errors. These apps “know” exactly what they need to do, as there are strict rules to follow for every situation, and they do it automatically. They don’t need to stop and think as people do. The algorithm simply does what it’s supposed to in seconds.
Thanks to the document capture elements of this type of software, it can access information in any document format and integrate it with the system instantly. On the other hand, a person would have to do it manually and risk inputting inaccurate info.
It Helps Customize Products
AI is also great at product customization, which works for both insurers and customers. For the former, it can make accurate risk assessments based on numerous data points and propose the best quotes accordingly.
For the latter, it really contributes to higher personalization levels. Personalization is becoming an increasingly important factor in every customer-centric business, and AI is expanding our abilities to provide it. Based on a customer’s profile and needs, it can come up with a policy that will suit them perfectly.
What’s more, if customers are not happy with their current policy, AI can help them adjust it so that they don’t have to pay a cent more than they have to.
An emerging trend is capturing real-time data through telematics. This is not only great for claims processing, but it also allows insurance companies to make more accurate client assessments.
It Helps Prevent Fraud
Unsurprisingly, fraud is a common occurrence within the insurance industry, and it costs billions of dollars annually. Of course, when fraud increases, so do the prices of insurance since someone has to cover the loss. In short, fraud hurts both the insurers and the insured.
Some of the most common frauds include inflating claims and misrepresenting facts. Luckily, AI can often help in these instances. AI-based anti-fraud software can compare the claim against the company database of claims and search for unusual patterns. This way, it can usually figure out if something is odd (such as a claim that is too high).
What’s more, the software can even scan social media, news, and other external systems for any useful data on the case in question before deciding whether it’s legitimate.
It Can Provide Customer Support
Possibly the best thing about AI in insurance is the fact that it doesn’t just work in the background — it can also face customers directly thanks to its ability to understand and produce natural language.
Customer support chatbots are a great addition to live agents. In fact, they can take on the bulk of work since they are available 24/7 and can cater to as many customers simultaneously as necessary.
There are many routine service tasks that these chatbots can perform with ease. For example, if a customer wants to update their status, make a payment, or ask a question, the bot will solve their problem in no time. It can pull out forms, process and integrate customer info, authenticate documents, and much more.
It Can Improve Retention
AI can also improve a company’s retention rates by proactively reaching out to customers before it’s time for renewals. This is a great approach since the software can let them know in advance if there are any changes in coverage or pricing so that they can consider their options.
If a customer is not satisfied with the current plan, the AI assistant can help them find another one that will suit them better and provide them with an updated quote. By being proactive, AI can capture the approval of those who are satisfied and stop those who want to leave by enticing them with a better, more personalized offer.
What’s more, if a dissatisfied customer is annoyed, the company won’t risk annoying them even more by having them wait until the agent produces a better offer. AI does this automatically, so there’s almost no wait time.
The Future of Insurance Is Bright With AI
As you can see, the insurance industry has undergone massive changes in a short time thanks to AI. However, this is just the beginning. AI shows enormous potential, and it remains to be seen how insurance companies will utilize it further. One thing is for sure — we will witness even more amazing AI-induced changes in the industry in the years to come.
Jennifer Wilson is a writer at Qeedle.com . She knows business processes and operations management inside out. As she understands all the challenges of running a small business firsthand, it’s her mission to tackle the topics that are most relevant to entrepreneurs and offer viable solutions.