AI technology is growing at a rapid pace. So, it’s no surprise that seemingly every industry is turning to automation. After all, it means increased efficiency, productivity, and profitability. Who could say no to that?!
In the insurance industry, we’ve evolved from paperwork to digital files, in-person to virtual meetings. Now there is the growing trend of artificial intelligence (AI) and automation. This has come in the form of chatbots, predictive analytics, and machine learning. Some insurance brokers may be hesitant to adopt these technologies. However, the benefits of automation cannot be ignored.
Key Benefits:
You can think of AI technology as the next evolution of using data. So, let's dive in and discover how AI for insurance works and how brokers like you can use it to stay competitive in today's fast-paced landscape.
What is Artificial Intelligence (AI)?
AI is the process of using computer science to create intelligent programs. They can perform tasks that are typically complex or time consuming for humans. We already experience them in everyday life, whether it’s speech recognition, decision-making, or language translation. These techniques enable machines to learn from data. They recognize patterns and make decisions based on that data.
AI has numerous applications across various industries, including finance, retail, and insurance.
Benefits of AI for Insurance Brokers
In the insurance industry, AI is used to automate processes and improve customer experiences. One of the advantages of having AI for insurance is the ability to automate repetitive tasks. You can get your data entry and document processing done in less time. This will help reduce costs and potentially increase revenue. This will free you up to focus on relationship building.
Additionally, AI can help you make more informed decisions. You will be able to identify new revenue opportunities by analyzing customer behavior, market trends, and risk analysis.
AI and Customer Service
AI has transformed customer service in the insurance industry. With chatbots, brokers can provide 24/7 support to customers. Chatbots are computer programs that use natural language processing. They can interact with customers and help with a range of inquiries such as policy information and claims status.
You might think this would make messages less personal. But there are AI tools to help brokers personalize their interactions with customers. Using your data and insights, the AI tools can respond to customer preferences and behavior.
AI and Predictive Analytics
AI can identify patterns and make predictions about future events. The process of insurance underwriting has been transformed, helping brokers and insurance carriers identify the likelihood of a claim being filed.
Predictive analytics can also be used to identify trends and patterns in customer behavior. It puts you in the driver’s seat to provide personalized recommendations and improve customer experiences.
AI and Fraud Detection
Fraud is a significant problem in the insurance industry. In fact, it costs the industry an estimated $80 billion a year.
AI can be used to automate the fraud detection process, reducing the time and resources required. It can detect and prevent fraud by analyzing data and identifying suspicious activities. With this information, the tools can help investigate suspicious claims.
Examples of AI in Insurance
There are many examples of AI being used in the insurance industry today. Lemonade, a US-based insurance company, uses AI-powered chatbots to provide customers with personalized assistance. The chatbots are capable of faster response times, managing up to 30% of customer inquiries without human involvement.
The Nayya platform uses a questionnaire, built on AI, to guide individuals and groups through the process of choosing health benefits. It factors in age, health history, and desired benefits to match them with a suitable benefits plan.
In the UK, Aviva is using AI to improve its underwriting process. The AI analyzes data from various sources, including social media and satellite imagery. Then it assesses the risk of insuring property and helps determine the premium for the policy.
Challenges with AI in the Insurance Industry
The biggest challenge in using AI is that it needs accurate and comprehensive data. AI relies on data to make predictions and to automate processes. Without sufficient data the AI tools use proxy information to try and reach a suitable outcome.
Another challenge is the need for skilled staff to oversee AI systems. AI requires maintenance to ensure it is working as needed. This can be a challenge for brokers with limited resources.
Common Concerns About AI
Almost anyone you speak to is concerned that AI will replace human brokers. While it can automate many tasks, AI cannot replace you in all aspects of your business. Providing a “human touch” is still number one when it comes to qualifying the buyer. That has not changed, even with today’s advancements.
Many business owners also worry that AI is too expensive. While implementing AI requires financial investment, the long-term benefits can be significant. Additionally, there are affordable AI solutions that can be scaled to meet the needs of a business.
Finally, there are concerns about the ethical implications of using AI in the insurance industry. Without enough human review, there is worry that it may discriminate against certain groups of people, such as those with pre-existing medical conditions.
The future of AI in insurance
We are in a unique position to put these AI tools to the test. Through our feedback and examples, AI can become more innovative and customized.
Customers continually demand faster service and more personalized solutions. AI is already filling this need through features like comparative plan shopping and quick claims processing. To remain competitive, AI will become critical for insurance brokers to adopt.
Implementing AI in your brokerage
The first step is to identify areas where AI can be most beneficial. It may be in customer service, risk assessment or processing time. You know your audience and market. So, you'll want to make sure that AI will be beneficial to all involved. Then you can begin to research AI solutions that meet your needs and budget.
It's also important to have an AI solution that can be easily integrated into your existing workflows. This will ensure a smooth transition and minimal disruption. If you have a team, it will be important to involve them in the implementation process. By training your team on how to use AI tools, you will be able to maximize the benefits of automation.
The benefits of AI for insurance brokers are numerous. While some may not be as quick to embrace this technology, the future of the insurance industry belongs to those who are ready to adapt. They will be able to stay competitive and provide the best service possible to their customers.