AI, What Does It Mean for the Insurance Industry?
Firstly, what is AI?
AI or Artificial intelligence is computer or machine intelligence which typically can demonstrate behaviours traditionally associated with human intelligence. Behaviours such as planning, learning, reasoning, problem-solving and in some instances, start to develop social intelligence.
For insurance companies, this means there are greater possibilities for gathering data and performing processes in ways they were not able to do in previous years. AI is an area of technology quickly becoming a big trend and is likely to affect the entire landscape of insurance as we know it.
The future of an AI-powered world is no longer just science fiction, it’s a reality. With applications ranging from always-on virtual assistants, self-driving cars, and Robot-advisors that manage entire investment portfolios Artificial intelligence has the potential to evolve current practices. Insurance firms will need to shift their mentality and in the process of this every aspect of the industry will transform
How can it be used in the insurance industry?
AI has predominantly been used for simple processes that require low decision-making skills such as data entry, compliance checks, standard customer communications, and managing rule-based decisions. now AI can perform much more complex processes usually reserved for a human workforce.
There are many ways in which the insurance industry can utilise AI technology, but fundamentally it will facilitate a change in how data is collected and used. Data collection will be more specific and intelligent and will give insurers a greater understanding of their customers. Not only this, AI will perform tasks in a more streamlined and time-efficient manner.
AI can pull data from many sources almost immediately. Data from existing connected and wearable devices will all be traceable with AI technology. Devices such as cars, fitness trackers, home assistants and smartphones along with new technology advances in clothing, eyewear, home appliances and medical devices will be a source for insurers and other businesses alike to tap into, resulting in an avalanche of new types of data.
By tapping into this data insurers will have a deeper understanding of customers as individuals rather than relying on assumed characteristics based on generalised customer profiles. Policy pricing will be informed by actual behaviour monitored by devices resulting in personalised pricing. Customisable coverage will be available to make the customer experience specific to the individual. Claims will be faster and tailored to each situation based on real-time data extracted from multiple smart devices. AI will also enable a seamless automated buying experience using chatbots that can pull on customers’ geographic and social data.
What does this mean?
As AI becomes more deeply integrated within the industry insurers will need to understand and adopt this change, embrace emerging technologies, build the skills of their workforce and create the culture and perspective needed to position themselves to respond to the changing business landscape.