What the future of an AI-enabled insurance industry looks like
Within the insurance industry, the adoption of artificial intelligence (AI) is increasing with 87% of insurance carriers investing more than $5 million USD in AI-related technologies each year.
The insurance industry is a long-standing partner of businesses and consumers in North America for well over 200 years. Despite its longevity, the industry has not remained stagnant in advancements and growth - 40% of insurers are actively searching for efficient tech-driven processes for claims and digitization to mitigate administrative work is in the forefront of their focus. Within the insurance industry, the adoption of artificial intelligence (AI) is increasing with 87% of insurance carriers investing more than $5 million USD in AI-related technologies each year. The future of the insurance industry leverages technology, namely artificial intelligence tools and platforms, to improve employee performance, manage the claimant relationship, detect fraud, and offer the best and most accurate service.
Insurance industry uses technology and AI to support underwriting
McKinsey believes that by 2030, it’s reasonable to expect that, “Underwriting as we know it today ceases to exist for most personal and small-business products across life and property and casualty insurance.” Underwriting will be reshaped by artificial intelligence to leverage data and make decisions around underwriting and pricing for the consumer or business requesting insurance. The automation of underwriting can provide a benefit to the insurance company and the consumer by increasing the speed on quoting with an optimization on pricing.
Insurance industry uses technology and AI to support third party management
Insurance companies rely on third parties, such as Independent Medical Evaluators, to support the claims journey. Software tools to handle scheduling, reporting, and relationships between the insurers and the third party companies or individuals involved could support a faster claims journey.
Insurance industry uses technology and AI to mitigate fraud
An estimated 5-10% of all insurance claims are fraudulent, according to the aforementioned McKinsey report. This is a challenge for insurance industries and often, the cost of fraud is passed down to the consumer, costing U.S. consumers nearly $80B a year. With the plethora of data available from insurers on fraudulent cases, artificial intelligence tools have been developed to recognize and flag potentially fraudulent instances and make judgements on whether fraud is likely based on certain factors. The implementation of AI in fraud mitigation could, in turn, save money for the U.S. consumer as well as the insurance provider.
Insurance industry uses technology and AI when handling medical records and claims
Analyzing medical and other records for insurance purposes is a paperwork-riddled (digital and otherwise) part of the claims journey. According to McKinsey’s report on Digital Disruption in Insurance, automation can reduce the costs of a claims journey by as much as 30%. Aside from cost savings, AI can also enable time savings. According to CVE, the ability to streamline their document processing with Wisedocs, enabled CVE to save approximately 5.5 hours on a case. Technology can partner with insurance provider teams, also known as human-in-the-loop, to support the claims journey and move cases along faster and at lower costs. Insurance executives are choosing artificial intelligence and machine learning to make smarter claims assessments.
The future of an AI-enabled insurance industry is already here
The impact that successful implementation of software and AI-driven tools and platforms will have on the insurance industry is positive for the employees, the claimants, involved third parties, and the corporations themselves. Insurance companies are already leveraging software and artificial intelligence to limit inefficiencies in backlog and administrative tasks, increase efficiency in underwriting, manage more positive relationships with claimants, and limit fraud. These impacts on the insurance industry will improve bottom line and drive productivity while creating more positive experiences within the sector overall.