In the insurance industry, artificial intelligence (AI) has become a buzzword. Nonetheless, despite the fact that we are still in the early stages of AI implementation, the industry has made significant progress.
The Need for AI in Insurance
Insurance is a long-established and highly regulated industry
. Perhaps as a result, insurance companies have been slower to adopt technological change than other industries. Insurance is still dominated by manual, paper-based processes that are time-consuming and necessitate human intervention. Even today, customers must deal with time-consuming paperwork and bureaucracy when filing a claim or enrolling in a new insurance policy. Customers may also pay more for insurance if policies are not tailored to their specific needs. Insurance is not always a pleasant customer experience in an age when most of our daily activities are online, digitized, and convenient.
Having said that, we are beginning to see a global push by insurance companies
to enhance their technological capabilities in order to do business faster, cheaper, and more securely. There have been several notable examples of insurers investing heavily in Artificial Intelligence solutions in recent years.
If AI technology is fully applied to the insurance industry, McKinsey estimates a potential annual value of up to $1.1 trillion.
How are insurers implementing AI?
There are numerous examples of insurers around the world using AI to improve both their bottom line and the customer experience. There are also a slew of start-ups offering AI solutions to insurers and customers
. I'll discuss a few interesting cases here.
The Future of Artificial Intelligence in Insurance
AI has the potential to transform customers' insurance experiences from frustrating and bureaucratic to quick, on-demand, and more affordable. Customized insurance products will attract more customers at lower costs. If insurers apply AI technology to the mountain of data at their disposal, we will soon see more flexible insurance, such as on-demand pay-as-you-go insurance and premiums that adjust automatically in response to accidents, customer health, and so on.
Insurance will become more personalized as insurers use AI technology to better understand what their customers require. By accelerating workflows, insurers will be able to save money. They will also discover new revenue streams as artificial intelligence-driven analysis uncovers new business and cross-selling opportunities.