Shortly before COVID-19 (coronavirus) shut down industry meetups, I attended an enjoyable insurtech event in Hartford, Connecticut. There was definitely a recurring theme among many of the industry influencers: artificial intelligence (AI) will be the next huge insurtech investment.
The numbers back up my anecdotal evidence. Research firm Novarica conducted an “Emerging Technology in Insurance” survey in early 2020, interviewing 108 insurer CIOs to identify current or planned emerging technology pilot projects. AI was a clear winner. Here is the breakdown of property & casualty insurance (P&C) carriers that said they were working on (or currently planning) an AI pilot.
AI: Image – 22%
AI: Machine Learning – 27%
AI: Unstructured Text – 21%
AI: Voice – 14%
Novarica noted: “For property/casualty insurers, AI and analytics capabilities continue to be a priority.”
Coronavirus has seriously impacted carriers’ willingness to spend, but we’ll still see investment in AI, because it will help P&C providers cut costs and create savings. Carriers are currently only scratching the surface of this emerging technology and figuring out how to harness modern AI, and yet they still see tremendous value.
Think about it: what are the main goals of P&C carriers?
• Manage risk better
• Create operational efficiencies
• Make underwriting more profitable
• Generate revenue
AI helps with each of these and much more. Carriers can use AI to examine extremely large data sets and speed up processes, automate decision-making, review books of business and portfolios, update rating on-demand, analyze risks and state filings…all at a speed and level of accuracy no human can come close to approaching.
Here are some specific insurance areas where AI can be effectively applied:
• Pricing – better understand your buyer and then use personalization to quote more competitively, based on need
• Underwriting – take advantage of the Internet of Things (IOT) to find and confirm information related to the line of business for potential customers and at renewal
• Claims handling – automate claims handling and repetitive processes, to free up valuable resources and have faster claims processes, which will increase customer satisfaction and strengthen the brand
• Fraud detection –spot abnormalities and identify false information. This is crucial, considering insurance fraud is estimated to cost carriers $40B annually!
AI can be a game-changer for insurers today and it’s only going to become more impactful in the future as it matures. A quick shift to artificial intelligence is the intelligent move for P&C insurers…