For more than 100 years Insurance industry has been functioning in very similar fashion but the recent developments in technology and its adoption by the people has made the insurance industry rethink about how it goes about its business.
A study by Mercer identified Technology and Big data as one of the top 6 challenges the industry is facing followed by Industry problems of Growth and Customer Focus issues.
This should not be worrying because the industry can start solving the issues of growth and customer focus using the new technology available now. A specific branch of FinTech has been carved out to cater to insurance. It is called the InsurTech. This class of technology is being specifically focused on Insurance industry use cases.
InsurTech is about leveraging the Artificial Intelligence capabilities that are evolving and working on Big Data available from various sources. One of the biggest use cases involves using Machine Learning algorithms to mine data to get better insights about consumers, their shopping patterns, lifestyle choices from huge data sets that are now available thanks to mobile and web adoption in the world. It can be safely said that innovation starts from looking and analyzing data, and the Insurance Industry is for sure to benefit from doing it.
The individual companies are transforming the way they handle selling insurance to processing and settling claims. Artificial intelligence is being used to completely handle insurance claims, making the whole process faster, in a recent announcement Lemonade Insurance demonstrated doing this in mere 3 seconds.
AI can not only help in claims processing, however, can also help in setting prices, modeling the risks associated with insurance, customer acquisition, distribution, and operations. It can solve problems across the whole value chain of the insurance industry. It does not take much to start as well. One recommended approach by Mantra Labs is to start with Digital Transformation and in the process start implementing the AI related improvements in the systems and processes.
Mobile Apps, Chatbots, improved Web interfaces are some key elements to improving the customer focus issues highlighted earlier and these can be assisted by AI to provide customised experience to individuals.
In Summary, we can say that AI is already transforming the insurance industry and it’s here to stay.