Artificial Intelligence & Machine Learning in Insurance: How to Get Your Data Working for You

Maarten Dauwe

As the insurance industry continues to realize the value of Artificial Intelligence, new applications for the technology will be employed for continual enhancement of the customer experience. But what is the best way for insurers to get started with these game-changing technologies?

The importance of partnering with a viable, established insurtech provider is critical. Carrier Management states in its report How to Value an InsurTech, “Virtually all of the InsurTech insurer startups in existence today will fail. They operate in the ‘kill zone’ of the majors—whatever modest innovations they’ve developed can be quickly and less expensively replicated by the incumbent insurers.”

However, AI and ML technologies are proving to provide significant benefits in the form of improved efficiencies, lower cost of operations, reduced processing times, and are fast becoming an imperative in order for insurers to remain viable. Today, we can already see that organizations employing these technologies are gaining competitive advantages and will only continue to improve. With AI, ML and other advanced analytics, insurers are realizing improvements in underwriting, claims and litigation management processes.

Investment & Deployment

AI and ML offer fast ROI and deployment options. Insurers have taken various approaches to introducing these into their operations. Data is always at the heart of any approach, and most insurers introduce AI and other digital technologies in conjunction with use cases. Typically, this starts with objective definition, followed by identification of needs to drive desired results, and finally mapping to the required data.

According to the International Data Corporation, spending on cognitive systems, including AI, will reach US $77.6 billion in 2022. Interactive AI such as chatbots and ML applications make up a significant portion of that investment. A Juniper Research study finds these investments are expected to save nearly $1.3 billion for auto, property, life and health insurers.

Quick-Hit Rollout

The insurance industry is wisely investing in AI in areas where the technology can be deployed quickly and immediate results can be realized, such as sales, distribution and claims settlement. AI is being used to drive lead generation and automate marketing efforts. It captures, analyzes and leverages big data to support underwriting and growing sales.

It becomes critical to have a stable partner when investing in AI and all hyper automation technologies

In 2021, we saw that despite the great technologies that the newer insurtechs have brought to the industry, many are failing due to overinflated valuations on their businesses, lack of industry expertise within their organizations, or a combination of both.

Sales & Distribution

Insurers are beginning to understand how to better leverage the data that passes through their organizations on a daily basis and ow they can leverage their past experiences for future insights. Two global trends have brought with them the mandate to maximize the value of the data captured in the course of normal operations. These trends are customer centricity and big data explosion. Understanding customer behavior is critical to ensuring a positive and effective customer journey. Weaving AI into the journey empowers insurers to leverage data sets with sales-driving actionable insights.

Claims Management

Juniper’s research also shows that AI will be highly disruptive for insurance claims management processes and will lead to a cost savings of nearly $1.3 billion by 2023 across automobile, life, property and health insurance, an increase of $800 million over 2019. Through AI-powered data collection and details analysis, insurers also stand to reduce claim settlement time, thus improving customer loyalty.

  • Artificial intelligence
  • Machine learning
Maarten Dauwe

Maarten Dauwe In his current role, Maarten Dauwe is responsible for developing and driving transformational strategies, leveraging strategic partnerships, and overseeing growth of the global P&C product portfolio. As a leader within the insurance technology space, he has excelled in delivering first-to-market solutions and shaping the future of emerging P&C insurance strategies.