Developing semi or fully automated insurance systems has taken off, thanks to huge advances in artificial intelligence (AI) technologies that are increasingly mature and adaptable enough to have a wide range of data analysis uses on the latest digital insurance platforms.
The use of AI technologies offers benefits for both insurers and their customers. In a recent guest blog on The Fintech Times, Aquarium’s director Mark Colonnese argues that AI and machine learning (ML) are indispensable for digital insurance platforms, wherever there is a need to replace human data analysis.
Much of the current focus is on claims management, where insurers are tapping into technologies such as AI and ML to replace traditional paper and labour-intensive processes delivering better customer experiences. We will increasingly see AI used for other areas of insurance, such as policy quotes and calculating renewal premiums.
In the early days, AI-based platforms required very specialist knowledge and gave mixed results. Now, AI is more reliable and able to more accurately mimic human thought processes. ML is considered a subset of AI, where software automatically learns from data analysis and improves its sophistication over time. These technologies have the capability to make intelligent human-like decisions but far faster than people could achieve.
One notable benefit is the speed and accuracy at which claims can be settled or policy quotes issued. Using AI and machine learning enables insurers to settle all but the most anomalous claims within seconds through an automated process; there is no need for human intervention.
Even for claims that fall outside standard parameters, AI enables insurers to assess these with a few clicks of a button rather than realms of time-consuming paperwork. From the end customer perspective, an insurance claim that is paid automatically within seconds provides an enhanced and hassle-free experience.
AI technologies are not without their challenges; there is a long way to go before they reach their full potential. Insurtech companies still need to invest in getting models trained up to specific business needs and to ensure that AI and ML software is using optimal data sets.
2021 is a pivotal year for insurers in all sectors deciding whether to capitalise on AI technologies. There is no doubt that these have matured enough to deploy and use at scale throughout the industry, and we are excited about the possibilities that AI will offer as this develops further.