Artificial Intelligence (AI) is now an integral part of our lives and it has also played a big role in insurance. While it would help insurance companies to be more efficient and reduce costs, the customers will benefit in the end. Let us take a look at how.
Providing Customised Products
“AI makes use of ML (Machine Learning) and Data Analytics to study consumer behaviour, risk factors, and policyholders’ preferences. Insurance companies analyse large datasets in real-time, which helps them create hyper-personalised insurance policies based on an individual’s specific needs and lifestyle,” says Saurabh Tiwari, Chief Technology Officer (CTO), Policybazaar, an online insurance marketplace.
This allows insurers to offer highly tailored insurance plans that cater to every customer’s individual requirements - like automatic coverage for frequent travellers or wellness benefits for health-conscious individuals. AI even allows the customisation of premiums based on risk assessment for each individual.
AI allows insurers to personalize insurance plans by analyzing customer data. For example, health insurers now use AI to track customer lifestyle habits, like fitness activities, and adjust coverage or offer rewards based on health-conscious behaviors.
Claim Processing And Resolution
“The traditionally slow process of claims management has been significantly accelerated with AI in the picture. Document verification, fraud detection, and damage assessment processes have all been automated now and claims can be evaluated within minutes,” says Tiwari.
Natural language processing (NLP) enables AI to understand and process customer communications. Image recognition technology, on the other hand, helps assess damages from photos - which comes in especially handy in motor insurance claims. Over the last few years, this automation has not only reduced human error but also ensured that legitimate claims are processed more quickly.
This has resulted in a smoother customer experience and faster claim payout. AI chatbots, powered by generative AI, also handle customer inquiries 24/7 and provide tips and guidance during the claims process.
In motor insurance claims, insurers can now use AI to analyze accident photos and assess damage within minutes, expediting claim approvals and reducing payout times.
Lowering Costs
Further, AI helps companies save on costs and the benefits are passed on to the customer.
According to experts, AI allows you to automate repetitive tasks like underwriting, claims assessment, and customer service which ultimately leads to substantial cost savings. Insurance companies can operate with reduced overhead by minimising the need to manually intervene in these workflows.
AI tools for fraud detection further reduce the financial losses that arise from fraud claims being filed. Insurers can pass these savings on to customers via lower premiums - making insurance more affordable and accessible for all.
AI tools have automated repetitive tasks such as underwriting, fraud detection, and customer support. By reducing manual interventions, insurers can cut operational costs. One example is AI-driven fraud detection algorithms that monitor claim activities, reducing fraudulent claims and allowing insurers to pass on cost savings to customers through lower premiums.
