By integrating Artificial Intelligence, insurers stand to benefit from a 10x increase in development speeds, transforming the market with products more closely aligned with individual customer requirements than before says Charlotte Koep at Root.
Some call Artificial Intelligence, the peak of human ingenuity. Although still in its infancy, the successes of Artificial Intelligence are mounting. The technology’s ability to automate repetitive processes with intelligence makes it a decidedly disruptive power in many sectors. It is transforming businesses and entire industries, from healthcare, manufacturing, and logistics to banking, financial services, and insurance.
Yet, research shows a marked decline in enthusiasm about Artificial Intelligence and increasing outrage about its societal impact. An August 2023 survey from the Pew Research Centre found that 53% of Americans say Artificial Intelligence is doing more to hurt than to help people keep their personal information private. Only 10% say Artificial Intelligence helps more than it hurts. The majority of Americans are concerned about online privacy and a lack of control over their own personal information.
These fears are unfounded. Artificial Intelligence has the potential to make industries more efficient, accurate, secure and customer-centric. Although we are barely scratching the surface of its potential, Accenture research shows that organisations higher up on the Artificial Intelligence maturity scale are using it to outpace their competitors and achieve 50% higher revenue growth than their peers as a result.
Artificial Intelligence is here and it is here to stay. It will likely be as or more transformative than the Internet. While calls to oversee this technology with care are founded, the stance on Artificial Intelligence in insurance is unequivocally positive.
We recognise the technology’s potential to drive efficiencies as well as objectivity in underwriting and claims decisions. The potential to enhance financial inclusion is an important consideration. As with most technologies, human oversight remains crucial. It is a delicate balance between leveraging Artificial Intelligence for efficiency and maintaining human judgement for ethical and complex decisions.”
By increasing operational efficiency, generative Artificial Intelligence has the power to transform the insurance sector, opening up innovation opportunities and strengthening customer relationships. Of course it is essential that insurers proceed mindfully, but the industry is already highly regulated and intensely scrutinised, which mitigates against many of the areas of concern around Artificial Intelligence.
By integrating Artificial Intelligence, insurers stand to benefit from a 10x increase in development speeds, transforming the market with products more closely aligned with individual customer requirements than ever before. This rapid pace of development is a significant change in an era where customer expectations are constantly evolving.
It is important to note that clean data makes Artificial Intelligence better. Its algorithms are well-suited to businesses where there is an established data workflow with large data volumes. Sectors which have maintained long-standing data banks, such as insurance, stand to benefit the most. Add an insurtech platform and you have easy access to this data, making it simpler for you to use Artificial Intelligence more productively and create more value for your customers.
Artificial Intelligence’s role is multifaceted, impacting every part of the insurance value chain. In marketing and distribution, large language models and natural language processing can personalise your messaging for specific customer personas, enhancing engagement and conversion rates. This level of customisation was once a distant goal, but is now increasingly attainable.
Policy administration and servicing, traditionally bogged down by manual processes, are ready for Artificial Intelligence-driven transformation. Smart chatbots, which are becoming increasingly human-like, now answer customer questions and provide 24×7 support.
The feedback these smart chatbots provide helps insurers to identify, calculate and price risks more accurately. Artificial Intelligence-powered fraud detection tools are helping insurers to identify and prevent fraudulent claims, and Artificial Intelligence-powered claims processing tools are streamlining the claims process and getting customers their money faster, she notes.
Artificial Intelligence’s potential extends to lead qualification and prioritisation in sales. By analysing extensive data sets, Artificial Intelligence can help target the right customers, reduce churn and improve sales quality. This is particularly beneficial in a sector with high customer turnover, where selecting the right customer from the outset is a key advantage. Artificial Intelligence can also detect fraud, predict customer behaviour, and assess credit risk.
Once a futuristic concept, Artificial Intelligence is a present-day reality with enormous potential. As insurers continue to explore and understand Artificial Intelligence’s capabilities, we can expect a more dynamic, efficient, and customer-centric industry that aligns with its values and responsibilities.
