‍The Future Of Insurance With Artificial Intelligence

In the last decade or so, Artificial Intelligence has transformed from a mere buzzword to the next big thing in today’s technology. Over the period of time industries such as insurance have gone through digital transformation finally. However, with AI in the picture, there is a lot more that the insurance industry can achieve.

In this blog, we will cover how artificial intelligence can help transform the insurance domain by implementing AI in different insurance operations.

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The growing trend of AI across industries

In modern day, implementing AI is a critical need. Even the insurance industry must keep up with it and embrace the positive impacts of AI. It can help insurance companies to be more efficient in the different areas of their business and in turn gain more profitability in their operations. 

With the current trends, it is clear that the companies leveraging AI will be leading the market down the road. Artificial Intelligence and Machine Learning are no longer some buzzwords but they are very important technology streams to equip and transform insurance companies.

94% of industry leaders agree that AI is now critical for success, especially over the next few years. Likewise, the insurance companies must also keep up with this trend. The fact that most of the companies are already experimenting with AI puts a sense of urgency on insurance companies. Early AI implementation can help insurance companies thrive in a competitive market.

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AI in different areas of the insurance industry

Insurance companies can take the opportunity of AI implementation to overcome their long-standing inefficiencies and challenges. AI can aid insurance companies to overcome issues surrounding sales conversion, customer engagement, customer support, AI agent retention, regulatory compliances, and even processing of claim applications.

AI can allow insurance companies to stand apart from competition by assisting them in their basic functions and allowing them to innovate their offerings. More sales, higher profitability, better customer experience, and detecting fraud are some of the areas where AI can help the insurance industry.

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Non-intrusive AI solutions for easy implementations

47% company executives confirm that their hesitation to AI initiatives is complexity regarding integrations of AI with their existing processes.

Often companies hold back with AI implementations as they are concerned about how AI solutions might interfere with their existing workflows. The companies do not wish to risk AI applications impacting negatively to their proven processes. Such lack of trust has kept many companies away from AI solutions.

The solution here is implementing AI solutions that do not necessarily interfere or modify the existing business processes of insurance companies. Such solutions are called non-intrusive AI solutions. These AI solutions would work entirely independently or on top of the current insurance workflows to avoid contradictions or interference.

For example, AI assistants helping sales reps recommend the right solution to customers or providing necessary insights to customer requirements would not affect the internal sales process in any way. Non-intrusive nature of these Ai applications gain more trust, comply with regulations, and leave efficient workflows of the companies untouched.

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Use cases of AI in the insurance industry

AI has expanded its capabilities across analysis, automating, predicting, and communicating. This growth of AI translates into a handful of applications in the insurance industry.

Customer Service

96% of customers would leave a company after a poor customer experience or will at least be willing to change. Customer service is more important to insurance companies than anyone else. Here are some ways AI can enhance customer service for the insurance industry.

• AI assistants : AI chatbot assistants could help insurance customers to find answers for their queries without requiring the attention of any human agent. It would eliminate long queues and help ensure that customers get quicker support at any hour of the day.

AI assistants are also scalable to deal with peak hour traffic and sudden rise in customer inquiries, offering scalability. Virtual assistants with AI are accurate, quick, and consistent in customer support.

• Personalized interactions : In customer care, personalized interactions can go a long way. AI can be helpful to offer a personal solution for each of the insurance customers unlike traditional rule-based chatbots. 

AI can learn the previous purchases and inquiries of the customer to come up with personal and unique solutions to their queries. Taking it to the next step, recommendation engines can help make the right recommendations based on the personal preferences of customers.

• Sentiment analysis : AI can also play a key role in understanding the customers better. The insurance industry can leverage Natural Language Understanding and Sentiment Analysis to better grasp underlying sentiments through conversations and respond to the customers accordingly. Sentiment analysis can also help understand customer feedback and improvise.

Sales Enablement

AI can provide insurance companies with a direct return on investment by helping them with sales conversions.

• AI to assist during sales calls : AI can help insurance sales reps before, during, and even after the sales call. From collecting customer requirements and pain points to assisting sales reps suggest the right offer, AI assistance can help through the sales cycle. It can help sales reps to prepare efficiently and quickly for customer calls.

• Helping sales reps focus : AI can help sales reps focus on the customers by taking care of the duties that surround sales conversion. AI can help transcribe and summarize sales calls easily by documenting notes. Moreover, AI can help sales reps prepare unique pitches for customers. It can help reduce turnaround time and improve the sales conversion ratio.

• Preparing presentations and collaterals : Generative AI is a domain of AI that can assist insurance agents to generate material that can assist them in the sales cycle. Generative AI can help sales reps by creating presentations or drafting emails for effective customer communication.

Claims Processing

Claim processing is the heart of insurance operations. How companies process claims matters the most for the companies as well as the customers.

• Effective claim processing : AI can help automate the claim processing by collecting the claim request and gathering the required information, which would help validate the claims and process them with none to minimal manual assistance from insurance agents.

• Fraud & anomaly detection : Insurance companies can use AI to identify fraudulent conduct or any discrepancies within claim applications. AI can verify and validate all the details to detect if something is inconsistent or fishy. This would make the claim processing easier and quicker for agents.

These are not all of the applications of AI but there are some more perks to it such as helping insurance companies keep up with regulatory compliances and retaining the talent within insurance companies. It’s evident that insurance companies must keep up with such advancements to compete and survive.

Best practices: key things to remember before implementing AI

While there are definitive benefits of leveraging AI in the insurance industry, it is important to implement AI correctly in insurance companies. Here are some things to keep in mind while implementing AI:

• It’s a long-term process : Effective implementation of AI is a process on its own. With AI, immediate results might not meet the expectations, but being patient and committing to long-term efforts is important before expecting positive outcomes.

• Legacy systems & interoperability : Insurance companies might have already adapted to digital transformation however every technology infrastructure may not be scalable to adapt AI. AI implementation might not always be non-intrusive and can require necessary transformation in the legacy systems. 

• Fostering innovation : Implementing AI is about innovating the workflows of insurance companies. It would lead to cultural shifts within the company and the staff, such innovation then grows outwards to create a new brand identity for the customers..

Challenges of AI in the insurance industry

Implementing AI in insurance companies is not so easy. Successful AI implementations demand that insurance companies account for the key challenges given below:

• Data acquisition : Insurance companies are managed manually for most of their operations. This makes it hard for insurance companies to collect data and especially replicate them in digital form for AI models to feed and process.

• Data quality : Data is a fuel to AI solutions. Without accurate data, AI algorithms can not lead to the right outputs. Particularly, insurance companies must cross-check and filter their data to make sure that AI can use accurate input to get accurate output.

• Lack of in-house tech team : Insurance companies do not consist of a dedicated tech team for their software development needs. For AI as well, insurance companies must identify and find the right partner that can help them end-to-end with AI implementations.

• Simplified user journey : It’s crucial that insurance companies implement AI, keeping user experience at the center of it. Adding AI into interactions and claim processing should not complicate the customer journey. Insurance companies must ensure that customers can experience the perks of AI implementations without facing any hassles in workflows.

• Educating the staff : AI implementations would mean that the existing staff has to get accustomed to new practices. These new AI practices would require that insurance agents work collaboratively with the software. To achieve so, insurance companies must educate their staff effectively and validate their training success.

The future of AI in insurance

It’s important to understand that we are witnessing the tip of the iceberg with current use cases of AI. There’s a lot more to innovate and achieve using AI for insurance companies. Here are some of the directions in which AI will expand and grow within the insurance industry:

• AI’s involvement in the insurance industry will become more transparent and trustworthy down the road. The growth of explainable AI will create a level of trust and transparency about the applications of AI and their working.
• Insurance companies will be able to achieve much more personalization with their products and services using AI. Every insurance customer would have unique requirements or requests that companies can fulfill by providing AI-based customized offerings.
• Insurance workforce can change drastically over the next few years as AI can help insurance agents to get rid of manual labor work. This could mean that insurance agents would have plenty of time to cater customers and make sophisticated decisions.

Surely, insurance companies can expect a drastic change in their functioning and culture as AI applications within the insurance domain grow in the near future.

Conclusion

AI is a key differentiator between the insurance companies at the moment. The use of AI could help AI companies to stand apart from the competition in terms of innovation, productivity, sales, and most importantly customer satisfaction. However, to implement such solutions, insurance companies would need a proven AI partner.

Companies like Alltius have years of experience cultivating AI solutions that can assist insurance companies in their different operations. If you are curious as to how you can begin with such an AI implementation, feel free to give us a call or leave a message and we can figure out the rest of it together.

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