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Artificial Intelligence in Insurance

New players, business models, and demanding customers are forcing insurers to change and digitize to stay ahead of the competition, improve service quality, and improve operational efficiency.

New players, business models, and demanding customers are forcing insurers to change and digitize to stay ahead of the competition, improve service quality, and improve operational efficiency.

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LatinAmerican Post | Hillary Walker

Participants in the insurance market recognize that the industry is far from being at the forefront of digital transformation. Meanwhile, new players, business models, and demanding customers are forcing insurers to change and digitize to stay ahead of the competition, improve service quality, and improve operational efficiency.

Digitalization of Services

The coronavirus pandemic has exposed many gaps and vulnerabilities in the insurance industry. Companies began to realize that it was time for them to change. Digital transformation is no longer needed only to survive the current crisis. This is an essential foundation for their future development.

Therefore, far-sighted market players began to invest in advanced products. Unlike other industries, technology budgets in insurance continued to grow even during the crisis. The introduction of AI solution for insurance can not only increase operational efficiency but also improve the quality of customer service.

How Does It Work?

Let’s consider claims handling. It takes too long, is error-prone, and doesn’t scale. This process is ideal for automation.

Claim processing consists of several steps, such as:

  • reviewing,
  • investigating,
  • correcting,
  • approving,
  • or rejecting a claim.

For each of them, insurers need to process many documents. By default, the process looks like this:

  • The application and documents enter the internal corporate system from the client, intermediary or third party.
  • The agent manually reviews the documents for the presence of the necessary data.
  • The employee manually enters data into the ticketing system.
  • The specialist evaluates the claim.
  • The employee manually checks the application for fraud.
  • The agent approves or rejects the application.

As a result, it takes a profile specialist several working hours to process each application. The client has to wait for a response for days and in case of an error — weeks. Automating the process with the help of advanced technologies can significantly speed up the process and reduce risks. How claims are processed after the introduction of artificial intelligence tools:

  • The application and documents enter the system from a client, an intermediary, or a third party.
  • Information about the applicant is automatically extracted from the documents. For this, machine learning tools are used that can recognize both structured and unstructured data.
  • Software robots enter data into ticket processing systems.
  • If necessary, the employee can view the data for verification.

In the car insurance sphere, the electronic guide helps the client step by step through the entire procedure: it asks to take photos from all the necessary angles, show the direction of the blow, and possibly provide additional information. All uploaded data is instantly sent to the company, where it is processed by artificial intelligence.

If you start digital transformation right now, in the end, companies will become fully automated enterprises, able to survive any economic and technological market fluctuations. New technologies are capable of fully automating the transactional and administrative parts of an insurance company’s activities, such as:

  • accounting,
  • settlements,
  • risk management,
  • credit control,
  • taxation,
  • and compliance.

This means freeing up insurance agents’ time for deeper work with clients and solving complex, creative tasks. AI solutions should be used right now.

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