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AI Ppt Unit 4 Part 4

Artificial intelligence (AI) is transforming the insurance industry by enhancing risk assessment, fraud detection, and reducing human error, ultimately benefiting both insurers and customers. AI enables more accurate risk evaluations and streamlined claims processing, leading to better customer service and tailored insurance plans. While the technology is still in its early stages, it is significantly changing how insurers operate and interact with clients.

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7 views

AI Ppt Unit 4 Part 4

Artificial intelligence (AI) is transforming the insurance industry by enhancing risk assessment, fraud detection, and reducing human error, ultimately benefiting both insurers and customers. AI enables more accurate risk evaluations and streamlined claims processing, leading to better customer service and tailored insurance plans. While the technology is still in its early stages, it is significantly changing how insurers operate and interact with clients.

Uploaded by

lori kale
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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AI and Insurance landscape

Artificial insurance improves several insurer pain points while simultaneously


benefiting the customer. Here's how.
•Artificial intelligence (AI) can help insurers assess risk, detect fraud and reduce human
error in the application process. The result is insurers who are better equipped to sell
customers the plans most suited for them.
•Customers benefit from the streamlined service and claims processing that AI affords.
•Some insurers think that, as machine learning progresses, the need for human
underwriters could become a thing of the past – but that day might be years away.
Assessing risk
 Historically, insurance underwriters have relied on applicant-provided information to
assess clients’ insurance risks. The trouble, of course, is that applicants could be
dishonest or make mistakes, rendering these risk assessments inaccurate.

 Machine learning, specifically natural language understanding (NLU), enables insurers to


pore through more abstract sources of information, such as Yelp reviews, social media
postings, and SEC filings, pulling pertinent information together to better assess the
insurance carrier’s potential risk.

 “Our ability to actually look at these textual data sources and pull out highly relevant
information is greatly increased [with NLU],” said Andy Breen, senior vice president of
digital at Argo Group. “We’re making use of these information sources that weren’t
available or easily disseminated before.”

 More accurate risk assessments mean more appropriate premiums. In an industry where
the largest difference between insurance companies is not their products but their prices,
a more individualized exposure model could make a big difference, said Sofya Pogreb,
COO at Next Insurance.
Detecting fraud

 Fraud is a major concern for insurance companies, and AI is a key watchdog in the fight
against fraudulent claims. As Samsung notes in a blog post about insurance fraud
prevention, it’s all about detecting patterns that might escape human cognition:

 “French AI startup firm Shift Technology incorporates this technology in their fraud
prevention services, which have already processed over 77 million claims. The cognitive
machine learning algorithms have reached a 75% accuracy rate for detecting fraudulent
insurance claims. The ML algorithms provide details on suspicious claims with potential
liability and repair cost assessments and suggest procedures that can resolve and enhance
fraud protection.”

 “The ability of machine learning to assist in spotting suspected fraud is well established, but
human-led data science is just as capable so far,” said Areiel Wolanow, managing director at
Finserv Experts. “The key difference over time will be one of cost.

 Professional criminals will keep abreast of industry-leading fraud indicators and adapt their
behavior to suit. Human data scientists will need to iterate their analysis over time to keep
pace, while machine learning algorithms train themselves over time based on observable
changes in the underlying data.”
Reducing human error
 The distribution chain in the insurance industry is winding and complex. A series of
middlemen examine information between the insured and the carrier, leading to a lot of
human error and manual work that slows the process, said Breen. However, AI is starting
to fix that problem.

 Algorithms can reduce the time and number of errors as information is passed from one
source to the next. By logging in to a portal and uploading a PDF, the insurer reduces the
amount of data entry and reentry and increases the accuracy, Breen said.

 “People get tired and bored and make mistakes, but algorithms don’t,” he added.

 For Pogreb, bridging the gap between the insured and the insurer is as important as
reducing error. With better data, both customers and insurers benefit, she said, because
insurers can develop better products based on more accurate assessments, and
customers will pay for exactly what they need.
Customer service
 Even in a sector as change-resistant as insurance, good customer service is paramount.
After all, people often stop using companies with bad customer service. That’s why so
many insurance company websites now include chatbots.

 These AI tools can guide customers through numerous queries without human
intervention. They’re also available 24/7, unlike many teams of actual people.

 For example, a customer who needs help accessing their account could ping the chatbot
for assistance right from the insurer’s website. This function could potentially resolve
customer crises in a jiffy. Real, human customer service agents may still be necessary for
more complex concerns, but AI chatbots can handle most of the remainder.
Claims processing
 Insurers exist to process claims and help customers cover them, but claims assessment
isn’t easy. Agents must review several policies and comb through every detail to determine
how much the customer will receive for their claim. That can be a painstaking process –
and AI can help.

 Machine learning tools can rapidly determine what’s involved in a claim and forecast the
potential costs involved. They may analyze images, sensors and the insurer’s historical
data. An insurer can then look over the AI’s results to verify them and settle the claim. The
result benefits both the insurer and the customer.
Does AI in the insurance industry benefit the consumer?
 Widespread industry adoption of a certain technology often reflects the benefits it offers to
companies in the sector, sometimes with no obvious effects on the customer. That isn’t the
case with insurance industry AI, which does have clear advantages for the customer.

 AI-assisted risk assessment can help insurers better customize plans so that customers pay
only for what they actually need. It can also minimize human error in the application process,
so customers are more likely to receive plans that properly fit their needs.

 Of course, it can also expand an insurer’s customer service options and streamline the claims
approval process. The end result is customers getting what they need.
The future of insurance AI
 The insurance industry has only begun its foray into AI, and companies are already
experimenting with new ways to incorporate it into their day-to-day operations in
anticipation of further technological development.

 “It’s the very early days of AI,” Breen said. “For menial, repetitive tasks, we put the
computer on it … but we’re a ways away from a computer underwriter. We’re really just
augmenting humans at this point.”

 That’s still a significant change in the industry, he said. Underwriters at Argo Group are
now beginning to manage portfolios, rather than review every single submission.

 The more standard, predictable claims are handled by machine learning algorithms,
Breen said, and the human underwriter is essentially fine-tuning the entire process and
intervening in cases that need higher-order decision-making.

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