75% of consumers would be happy to get computer-generated insurance advice.
Consumers want personalized solutions, and AI is making that possible for insurance companies in multiple ways. In other words, artificial intelligence is improving the way consumers already interact with insurance companies.
Insurance agencies want to optimize operations so that they can report claims faster, streamline customer interaction, and keep the bottom line healthy.
And that's where AI comes into play.
Insurance businesses need to marry operations on the backend with better workflows on the front-end.
There are five distinct ways AI to doing that, and we’ll show you exactly how to each one is working this article.
But first, you need to understand how artificial intelligence works, along with how insurance companies stand to make more money by giving consumers exactly what they want when they want it.
A Brief Introduction to AI
AI is a little computer code in the smallest of devices that are programmed to do what takes humans twice as long. And it never sleeps. That's it.
AI is not new. The Fitbit on your wrist keeping track of your steps, your heart rate, your weight, your next appointment and that anniversary that is coming up fast on the outside, that's AI in action. And, it doesn't stop there.
According to a recent study, 75% of industry executives expect AI to change the insurance industry for the better.
You may be asking yourself, how will AI transform the insurance industry?
Let's dive into the details below.
How Will AI Impact The Insurance Industry?
Think about last time you made an insurance claim, how long did it take for you to receive a call from your insurance company? The average cycle time is 10-15 days. With AI-powered insurance claims, this average cycle time is reduced to 2-3 days.
Reduced cycle time isn't the only benefit to automating insurance claims. Fraudulent claims cost the insurance industry more than $40 billion a year. AIG's has been using AI for their claims process.
AIG's head of analytics said "Claims processes are becoming a lot more efficient, fraud will likely be caught more often, and most importantly of all, more and more losses are and will continue to be prevented.”
We're also already seeing improvements in fraud claims with help from Shift Technology. They have already processed over 77 million claims and have reached 75% accuracy for detecting fraudulent insurance claims.
“Personalization” is a common word in marketing.
It pulls at emotions like peace, love, and happiness with your customers.
Until AI, many insurance agencies have been missing the mark on this idea of personalization.
With the integration of AI, insurance companies have an opportunity to use information collected from machine learning to develop marketing campaigns. Marketing campaigns based on human emotion that create a more meaningful message.
Let's take a look at USAA for example. USAA uses Watson for its virtual assistant. Her name is Eva. Customers will ask Eva questions about their policies. Based on these questions customers ask Eva, Eva will follow-up with automated email campaigns that offer personalized suggestions.
Insurance underwriting is one of the first jobs that will change due to AI. Insurance companies are developing their own AI tools to analyze risk. This will impact the amount of insurance, and the type of insurance people buy. AI provides the opportunity for insurance companies to create predictive risk models. Insurers could potentially create a different policy for each person. They can assess risk one individual at a time.
Price Waterhouse Cooper said "AI’s initial impact primarily relates to improving efficiencies and automating existing customer-facing, underwriting and claims processes. Over time, its impact will be more profound; it will identify, assess, and underwrite emerging risks and identify new revenue sources.”
FitSense is an example of an AI platform that collects customers health data from multiple devices. Meaning, FitSense's machine learning agent will comb through your LinkedIn profile, Facebook posts, tweets, etc. to provide data that assesses your risk. This data is used to build a customer profile. Once the profile is established, insurance companies can streamline underwriting and price more efficiently based on the data in the customer profile.
AIG has already invested in wearable trackers to begin tracking this data.
4. Data. Data. Data.
Gaining customer data isn’t a new AI trend for insurance companies, it’s expansion. It takes consumer insights to make their experiences better.
Nearly 80% of insurance executives believe artificial intelligence will revolutionize the way insurers gain information from their customers. This data gathered by AI may even improve customer behavior. Let me show you how below:
Every day nine people are killed and more than 1,000 injured in crashes that are reported to involve a distracted driver.
This statistic above is why State Farm created Distracted Driving Detection challenge. State Farm is aiming to reduce the number of accidents from distracted driving by using dashboard cameras to detect the driver's behavior.
State Farm is still working on launching this AI tool.
If you've used Slack, Facebook Messanger, or WhatsApp, you've already used a chatbot. So, how do insurance companies use chatbots? From onboarding consumers to checking fraudulent claims, chatbots automate these tasks.
Here are two great example:
Insurify created Evia (Expert Virtual Insurance Agent) that follows-up after a consumer submits information for car insurance quote. Evia gathers personal data and information from your driving record to save consumers time by skipping the long insurance forms.
GEICO’s also launched “Kate” January 2017. Kate is a virtual assistant who can conversate with consumers via text or voice recognition. Customers can ask her questions policy coverage, billing, and find answers faster.
Insurance Companies are Adopting AI
Insurance companies adopting AI will give their customers a better user experience and keep margins growing. AI has it's own pros and cons. The decisions to integrate AI into your insurance business model will affect your operations, sales, customer experience, and just about every other major internal decision.
It might not be a smooth transition. But the potential value of AI can far exceed the costs.
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