According to Michael Bruch, Head of Emerging Trends at AGCS, AI is likely to transform the insurance industry, to the benefit of customers and insurers alike. There is lots of potential for AI to improve the insurance value chain by making it more effective in addressing customer needs, delivering value on time and at lower cost. AI is likely to make a big difference in three key areas. Initially, it will help automate insurance processes, such as claims and underwriting. But over time, it will give insurers and their clients a better understanding of risks, and it will change the way insurers interact with customers.
To date, insurers have mainly focused on developing AI applications for personal lines, but increasingly they are turning their attention to commercial insurance, including the large corporate market.
AI has the potential to bring about significant cost savings for commercial insurance, as well as speeding up the insurance transaction process and enhancing service in areas such as analyzing submissions, checking or verifying policy documents, developing new insurance solutions and services or flagging up potentially fraudulent claims.
According to Michele Lagioia, an affiliate of the Italian Association for Artificial Intelligence, the claims process, in particular, would benefit further from increased automation. “AI and automation would make for a much faster and more efficient settlement for lower value claims. Even with more complex commercial claims, AI could support claims decisions, speed up some processes and make for a more customized claims service,” says Lagioia.
Insurers in the life and health market are already using AI to review and analyze policy wordings and validate claims. Last year, start-up insurer Lemonade set a new world record when it used an AI claims system to accept and pay a claim for a lost item of clothing within three seconds, and without any paperwork. And many commercial lines of business, such as motor and workers’ compensation lend themselves to automation.
By automating repetitive tasks, people would be free to focus on value-added work, like client relationships, risk assessment or providing technical support.