What is the Role of AI in the Insurance Industry?

Artificial intelligence is a simple yet complex concept. It is the act of making machines smarter and giving them the ability to think and analyze as humans do. But there are a lot of factors involved in the process. AI as a wonder solution has been talked about for a long time. Yet, it wasn’t until a while ago that enterprises began to take the step forward and embrace AI.

With AI still being in the initial stages of development, most enterprises are focusing on integrating AI tools into individual departments rather than use the technology to give the entire business system a makeover. They have proved that AI is not limited to any industry.

While the concentration has been on manufacturing, marketing, customer service, and logistics, AI is also being preferred by the insurance sector. More than three years ago, a well-known firm said that using AI tools would bring new life and energy into the insurance industry. To an extent, AI has indeed been successful in reducing costs and increasing efficiency while focusing on customer service.

Here is how AI in the insurance industry has been bringing a change by using intelligent automation and providing virtual assistance.

Personalized Policies and Offers

One insurance policy for all isn’t what customers want today. They don’t want to take a policy because someone else did. Offering them customized policies that suit their finances and will provide them with the returns they require is the key to success. Big data and IoT collect and analyze information related to the prospective customer. By analyzing the data based on various factors, a comprehensive policy or a scheme can be offered to the prospective customer, which increases the chances of converting them into a customer.

Customer Service Availability

It doesn’t matter which industry the business belongs to. Customer service is the utmost priority. The insurance industry is no exception to this rule. It is even more essential for the business to be available round the clock to help customers. Whether it is about taking a new policy or filing a claim, the process has to be hastened to keep the customer happy. Chatbots (also known as virtual assistants) using AI can provide answers to FAQs while also detecting fraudulent claims.

Natural Language Processing (NLP)

NLP is the science that helps computers understand and process raw data that is scattered throughout the business. Be it the emails, messages, voice conversations, lists, customer files, etc. data is not organized into neat rows and columns. NLP recognizes data stored in different formats, collects, and processes it so that enterprises can gain insights that help in understanding customer’s requirements.

Machine Learning and Computer Vision

Machine learning and computer vision can bring accuracy to the business process. If automating repeated tasks is one step, identifying patterns and highlighting them to get better insights is another. Images are a source of proof for many insurance companies. Especially for vehicle and house insurance, images play a role in understanding what had happened. With AI in the insurance industry, the images sent by customers/ agents are processed by the AI system to analyze how much damage has been caused and generate a tentative amount of loss incurred. Some tools can also identify and provide in-depth feedback where the cause of the incident could be due to human negligence.

Many businesses in the insurance industry are gradually adopting artificial intelligence to become customer-friendly, provide quality services and policies which are useful to customers, reduce the cost of investment in daily operations, and improving the overall performance of the business.