In today’s rapidly changing economy, many insurance carriers are focused on investing in technology to keep up with shifting customer demands. One of the key factors driving technological innovation is the desire to refine and improve the claims process. Many leading insurance firms are turning to automated solutions powered by AI (artificial intelligence), machine learning and cognitive computing.
AI is the top tech trend across all business sectors likely to have the biggest impact over the next 5-10 years. At present, insurance providers see AI as a cost-cutting technology that can help them stay competitive — but few have tapped into AI’s full potential.
How AI can reduce costs and improve customer experiences in the short term
Legacy claims management systems can be a hassle for adjusters, risk holders and policyholders alike. In fact, close to 90% of customers cite an effective claims processing system as a top factor when picking an insurer. This, combined with increasing operational costs, is pushing insurance providers to look for better ways to improve customer retention, save time and contain costs.
Even after providers have adopted new technologies, challenges can arise if they are not integrated properly. Forcing adjusters to hop back and forth between many different portals and manage vast amounts of data is time-consuming, impractical, and can lead to increases in error rates. With many industry professionals struggling to keep up, AI could offer a comprehensive solution.
AI can help bridge the gaps between other emerging technologies. Using predictive analytics, adjusters can access data from multiple sources in one digital platform. AIs can crunch through large datasets much faster than a human analyst and they are less prone to errors. Adjusters can also offload much of the management process for simple claims onto automated, AI-powered systems while still enabling high quality, well-informed interactions with customers.
AI offers opportunities that insurance providers have yet to leverage
Automated systems backed by AI have the potential to reshape and enhance every aspect of the insurance industry from underwriting to claims to service, leading to reduced costs for insurance providers and happier customers. According to McKinsey, AI and machine learning solutions will replace more than half of claims activity.
Insurance providers will soon be able to restructure workflows to incorporate more and more AI-enabled processes. This will provide consumers with more intuitive user experiences and give them more agency throughout their claims journey. It will also allow adjusters to spend more time and energy on the most complex, layered claims while still maintaining a human touch across all interactions.
Where insurance and AI can go from here
Many analysts see claims avoidance as the true pinnacle of what AI can do for insurance providers. Companies that have access to automated alert monitoring and management can help preempt potential problems and fix issues before they become claims.
Still, challenges remain in AI adoption. The quality of an AI-powered claims management system is only as good as the data gathered at FNOL, and AI-powered systems need ongoing expert maintenance to ensure accurate outputs. Altogether, this means insurance companies need to partner with technology experts with the right expertise and experience in their industry to take full advantage of AI technology and gain a competitive edge.