Due today Artificial Intelligence was only a buzzword that helped startups and media gain more interest. But now it is a technology implemented by global businesses in various industries. AI changes the way we perform day-to-day tasks.
Artificial Intelligence can do a lot of fascinating things: detect specific details in the news stories, sort the details into groups based on our preferences, create realistic portraits of non-existent humans. Artificial Intelligence helps us take better selfies automatically improving the picture.
Moreover, AI-powered business tools allow companies to make better data-driven decisions. This technology improves our lives significantly, and it’s time to implement it in many areas of human activity.
One of the domains that can benefit from AI is insurance. Adopting Artificial Intelligence brings advantages for both companies and their customers. It can simplify claims processing for managers and make settlement fairer and more transparent for clients.
What is claim settlement?
A claim settlement is a form of agreement between parties that allows handling insurance disputes. Settlements take place when the policyholder suffers some loss or damage which is covered by the insurance company. This is usually the case with car accidents or personal injury claims. The policyholder files a complaint to get the amount of money specified by the insurance agreement and meet hospital or repairing service expenses.
The insurance company reviews the claim and decides whether it gets approval or not. There are a lot of different nuances that impact the final decision. Sometimes companies would even initiate an investigation to make sure that the occasion took place and check whether the repairing or healing estimates were calculated correctly. The insurance company aims to eliminate fraud.
Fraud Detection with Artificial Intelligence is only the beginning of Insurance pipeline
How can AI fight unfair claims settlement?
Most people see Artificial Intelligence as a tool that organizes data. And it is true – AI has an incredible data processing capability and allows creating a complex and convenient environment where both businesses and their clients can interact with the information. Artificial Intelligence facilitates data management by making sharing, editing, and reviewing intuitively simple. It creates a steady flow of information and makes it easily accessible.
There are other benefits of AI. It can nearly eliminate unfair claims settlement. First of all, the insurance company can implement AI-based chatbots in the workflow. It will automatically process requests and interact with the client. Such technology will not only take away the need to review each claim manually but make sure that there is no mistake in the decision.
The customer files the claim to the bot with all the evidence attached. The bot will collect the data and update the information in the system. But the most amusing thing is that Artificial Intelligence gives bots an ability to review the claim and score fraud possibility. AI can learn from sample data sets; and if trained with industry-specific information regularly, it can start recognizing fraudulent patterns in incoming claims. Insurance companies can create an algorithm that will help bot with detecting scam cases according to local underwriters’ experience.
The similar algorithms and mathematical models save clients from different confusions too. As the bot processes the claim, no human factor is involved. Therefore, there will be no biased decisions or mistakes made.
Once the AI-based system learns all the information, it can make better choices and decisions than human makes. Computers are better at remembering things than human.
What is a customized claim settlement?
There are standard-setting organizations, both local and international, that regulate the way insurers operate. For example, the US insurance companies comply with the laws that are defined by the NAIC – the National Association of Insurance Commissioners. It sets requirements for insurance companies and creates uniform regulations. While these laws make things more comfortable and transparent for companies themselves, they are often not customer-oriented.
If a client needs car insurance, the amount of contribution depends on day-to-day car usage. But there is a common situation when the policyholder starts driving more often than regular home-work-home trips. The daily driver has more chances to get into an accident than the occasional one.
Often such a situation leads to the unplanned expenses that are covered by an insurance company. It is not fair enough for an insurance company if it provides policy discounts, relying on fair car usage.
Such unfairness force both frequent and occasional drivers to pay the same amount of money for insurance policies. So, wouldn’t it be more logical and fairer to make the premium higher for those who drive or start driving a lot?
While it sounds complicated to execute, the solution is straightforward. All the policyholder has to do is install a telematics sensor (GPS) in the car. GPS trackers start from $5 per single unit.
Such a sensor can track how careful the driver is, and the insurance company can adjust the premium based on this data. Everyone can agree to the fact that more careful drivers should pay less for the insurance policy.
It is a win-win approach for both parties. Insurance companies will get more money from those who get in accidents often and need frequent repairs. And careful car owners will pay lower premiums saving extra money. Such rules will also make policyholders more attentive and safer on the road.
Artificial Intelligence can also analyze the big data extracted from the lifestyle of customers to determine the risk factors and grant financial stability. Since this technology can stay strict and attentive to details studying the data, it can predict risks better. Such an approach will protect insurance companies from fraud, and clients from unfair claim settlements.
Finally, the best feature of Artificial Intelligence is that it allows us to make the service as personalized as possible. Clients today look for customized deals that will be personalized and unique. In the reality of the modern oversaturated insurance market, companies have to survive, and the simplest way is to offer a service with a personalized touch.
Other benefits of AI for insurance companies
This technology is no doubt an excellent improvement for every aspect of the workflow. But there is much more Artificial Intelligence can do for insurance companies. It can help to bring this business to a new level and attract even more clients.
The share of AI implementers that are deploying AI. Insurance is among the leaders.
For example, Neos Ventures provides not only insurance services but smart home monitoring as well. Customers install sensors in their houses that will control the environment and make sure accidents won’t happen. If one thinks that such a preventive approach makes the company lose money, they will be entirely mistaken.
First of all, people are ready to pay for the guarantee that there will be no accident in their house. Therefore, the company gets an income both from premiums and sensors they sell. Once the sensor detects an issue, the customer service immediately contacts the client and informs about it. Along with that, the support offers to send someone to fix the problem with the insurance covering all the expenses. It is incredibly convenient, and people are ready to pay more money for personalized service.
With all the wearables, health insurance becomes more intelligent. Predictive analytics powered by Artificial Intelligence opens up many opportunities for healthcare. For instance, health insurance companies can create a rewarding preemptive care system that will encourage clients to maintain healthier lifestyles. Healthy people will require companies to go through healthcare claim management and provide insurance coverage less often.
It is reasonably hard to underestimate the importance of Artificial Intelligence in Insurance. This technology can improve every aspect of our lives, simplify routine processes and take care of mundane tasks. We can only anticipate the positive changes AI will trigger in the future. And we will see the difference quite soon.
There already are insurance companies and other businesses that implement Artificial Intelligence in their workflows creating better, more personalized offers for their clients and winning the competition.
Since AI is still on its rise, now is the best time to think about adopting it and upgrading your company before all your competitors do. The earlier you start using this technology, the more advanced it becomes as it learns continuously. Keep in mind that clients are becoming more demanding when it comes to services. Make sure you can meet their needs. And Artificial Intelligence is a great help to you on this journey.
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