Every industry has been affected by the epidemic in some way. The insurance industry is no exception. However, the silver lining is that it has emphasized the need for technology, particularly Artificial Intelligence (AI) and Cloud Computing for this sector.
Artificial intelligence in the insurance market is predicted to reach USD 6.92 billion by 2028, with a compound annual growth rate of 24.08 % forecasted through 2028.
According to a survey, 21% of insurance companies are preparing their personnel for AI-based systems that are collaborative, interactive, and explainable. Investment in AI insurance is expected to be high on decision-makers’ agendas.
The increasing demand for individualized insurance services necessitates insurance automation for operational processes. AI accomplishes the same thing by automating the operational activities that humans execute, allowing them to be completed without tiredness or error in a smaller duration of time.
Impact of AI on the Insurance sector
When it comes to the insurance industry, innovation isn’t the first thing that springs to mind. AI has been gaining traction in banking and logistics over the last few years, but the insurance industry appears to be unconcerned about its potential. However, things are changing, and insurance firms are embracing the potential that modern technology provides. And they’re outstanding, benefiting both the businesses and their customers.
The insurance industry is frequently associated with mountains of paperwork, lengthy meetings, difficult claims, and months of waiting for a decision. The AI enables insurance businesses to significantly transform their image, adapting their services to 21st-century norms while retaining high transparency.
Customers will be relieved of some concerns, and their faith in the insurance provider will grow. Simultaneously, businesses can use AI to boost their growth by reducing risks and automating numerous procedures to reduce total expenses.
How does AI add value to the Insurance Industry?
In order to be competitive, the insurance business must embrace cutting-edge technology to provide value to the time-consuming and exhausting insurance process.
Streamline claim processing
Claims processing is a time-consuming process. To calculate how much the consumer will receive for the claim, agents must review numerous policies and fully comprehend them. Many steps are repetitive and typical duties must be completed. In the insurance industry, machine learning can take over such automated tasks to reduce errors and the time it takes to process a claim.
Companies have been using emerging technologies like AI, RPA, and the internet of things to improve operational efficiency (IoT). Because of the rise in connection, smart home assistants, fitness trackers, telematics, healthcare wearable devices, and other IoT devices, insurers may now stay connected and collect complete data automatically. This information can subsequently be incorporated into the underwriting and claim management processes, resulting in better decision-making and lower risks.
The development in connectivity and utilisation of IoT devices makes it easier to retrieve larger datasets with accurate data. Natural language processing (NLP) allows insurers to assess risk by retrieving relevant information from an abstract resource.
According to research, the advantages of AI in insurance, particularly in underwriting, include the ability to:
- Model a possible market with an accuracy of 83 %.
- Reduce underwriting throughput time by a factor of ten.
- Increase case acceptance by 25%.
Fraud detection and prevention
Every year, the massive insurance sector receives nearly $1 trillion in premiums. The fraud ratio is far too high given the size. Non-health insurance fraud is expected to cost over $40 billion per year, resulting in a premium rise of $400 to $700 per year for a family. Read on to learn how artificial intelligence can be used to avoid insurance claim fraud.
Use cases of AI in the Insurance Industry
With examples, it becomes easier to comprehend. Some of them are listed below
ZestFinance- utilization of AI in risk assessment
AI enables lenders to examine both traditional and non-traditional data, allowing them to better assess risk. A more efficient and automated underwriting process helps the organisation increase profits while lowering risk.
It’s an Insuretech start-up that employs artificial intelligence to automate end-to-end insurance tasks. It has helped them save money on operations, allowing them to lower prices, enhance client acquisition, and improve customer experience and engagement.
AI creates a wave of consistency across market segments, industrial verticals, and service providers. As a result, the procedures for getting insurance and settling claims can be more consistent across the board.
It is evident that AI-driven insurance has a bright future ahead of it, and the use of AI in the insurance industry will skyrocket in the coming years.
If you have any questions or concerns about how to use AI in your organisation, please contact Stellar Digital. We’re a software development company that specialises in mobile app development, web development, and digital marketing. Our team of professionals is always available to answer any questions or concerns you may have.
Simply mail us at email@example.com and get in touch with our team.