By: Eric Truntz, Senior Principal
With standard purchasing and service experiences that have not advanced and with larger and somewhat unexpected brands dominating or entering the market, the insurance industry is ripe for disruption. Industry pundits tout that they are in the midst of being severely disrupted thanks to Artificial Intelligence, Machine Learning, and now, especially, Deep Learning. With such advancement in Artificial Intelligence, and at such a rapid clip, it’s imperative now more than ever for insurance companies to take notice and get on-board—or get left behind.
Think of the following scenarios and how they might influence your business. Does an autonomous car that provides a potentially better driving record for a policyholder yield a decreased premium? Or, perhaps your sales associate incorporates geographic and social data for a more personal experience. Maybe your claims processing integrates AI to identify patterns that allow you to scale with minimal impact to operational costs.
The Future is Now
While many of these applications seem futuristic, the future is now, and some insurance companies are already leveraging much of this sophisticated technology – albeit incrementally in small chunks. As you explore these opportunities, consider the gain for both parties – your business and policyholders.
What’s in it for You
The benefits of AI for customers can be apparent, but first and foremost, AI can make things easier, more streamlined, and less costly in the long-term for your business. Take protecting yourself from fake claims, for instance. Thanks to AI, web-crawling tools can search social media accounts to find evidence of a fraudulent claim–like pictures of the policyholder enjoying a vacation in a different location.
Or perhaps you’re trying to reach the millennial demographic—a population that appreciates a speedy, helpful customer experience. Insuretech company Lemonade is promising a 90-second personalized policy thanks to their chatbot AI Maya. A quick policy can be a gamechanger for this time-crunched generation, and a 90-second policy can be an immediate business differentiator. Similarly, many other companies are processing less complicated claims quickly thanks to AI chatbot technology.
When evaluating what AI can do, it’s okay to be a little selfish. Look first at the business challenges and goals and then evaluate the technology that can help you meet those objectives. It’s likely that the AI technology you implement has a cascading down effect that benefits the policyholder, too.
What’s in it for Them
Policyholders reap the rewards of AI with a vastly improved customer experience, better pricing policies, and faster claims processing. Throughout a person’s different life stages—young adult, middle age, and beyond, different needs arise (think car insurance and life insurance, etc.). Through predictive analytics, insurance companies are better able to position certain product lines at different times of a policyholder’s life. Presenting policyholders with relevant information can not only improve the experience, but boost the bottom line, as well.
Thanks to the Internet of Things and the abundance of sensors, pricing models can also shift based on behavior. This could mean that safer drivers, people with healthy habits and activities, and less frequent travelers also gain the benefits of a personal pricing platform and pay less. Also, these sensor-driven premiums mean that risk assessment is easier with more data to inform any algorithms.
The role of AI in any industry—but especially one that is ripe to be disrupted—is both fascinating and daunting. As we look ahead to a new year and beyond, it’s exciting to see the long and short-term impacts and gains from these emerging technologies.
Ready to add AI/ML to your business? Consult first with a team of experts with a proven track record in insurance-based AI. Let’s get started.