How Insurance Companies Are Flourishing Under AI: Different industries are using AI in a variety of industries. (AI) and other related technologies to simplify their processes. Although it’s easy to envision this happening in the manufacturing sector, the traditional service-based industries are too, and some of them with remarkable outcomes.
One of them is the insurance Companies which have even been given the name “Insuretech” to describe the software changing its business processes. The next section will look at how AI can help insurance companies grow.
In times of uncertainty uncertain times, the right insurance policy can give you security. This is evident in the huge growth that insurance companies have seen over the last few years. Revenues from health insurance and medical insurance alone have increased by 3% year over year from 2017. This is not even including insurance for vehicles, property and life insurance.
However, not all of this growth is due to the uncertainty of the people or an expanding population contributing to the revenues. In many cases, it can be attributed to the way the industry has been streamlined and improved its operations through the use of AI. The companies that have made these improvements have seen the benefits. Forward-thinking companies like Honeycomb Insurance have even managed to expand into new states. The company has shifted into Georgia as its 9th state of operation and even raised $15 million in the year’s first quarter.
For a long time, the underwriters relied upon witness accounts, often provided by the person applying, to determine the risk. The problem is that people tend to forget or could deliberately lie about their accounts. This can result in an overflowing trail of paper that takes up the resources and work.
The Internet of Things is in connected devices, from fitness trackers to automobile recording devices. It is huge assistance; all this information is processed using AI algorithms. The ability to scan them faster than human agents permit companies in the Insurance Companies to settle claims quicker.
A more accurate assessment means fairer premiums. This will increase competition in a field where cost is everything. The ability to personalize will result in customized policies for businesses and consumers. For instance, companies like Honeycomb Insurance have been at the forefront of this for a long time. Specialized in residential insurance, they’re creating policies geared toward people’s needs and are driven by technology. This helps make the process easier and could lead to more precise pricing.
Technology has also accelerated the efficiency of operations to reduce the amount of paper trail insurance. Optical character recognition (OCR) is a technology which recognizes handwritten words and converts them into digital documents. Administrative assistants do not have to typewritten text to upload it into digital systems. They can also go even further by obtaining data from photographs.
Insurance has long been a place of scams, with greedy people believing they can trick businesses to pay for their ill-conceived actions. Some of the frauds are obvious, while some are more difficult to prove. Huge profits are lost to fraud each year. Although this is improving fraud detection, technology may assist in making it an obsolete issue.
AI can do this by detecting the patterns common to fraudulent activity. Some algorithms are now able to achieve accuracy rates that are as high as 75 per cent. They can spot any irregularities in claims and also conduct cost assessments. Of course, AI is only considered successful if it can maintain these processes independently. Criminals always find ways to evade the system, which is why the system will have to be able to adapt. However, there’s plenty to gain with the yearly loss of $40 billion due to insurance fraud.
The Future of Insuretech
There is no way to say that AI is an answer to all problems. The Insurance Companies and its promises are distinctive; you can observe that they’ll always require a human eye to watch over them. However, users can use this system to make the process more efficient. They could help reduce the amount of money insurance companies lose through fraud or make greater payments than required. But, it could also benefit the customer and result in better individual estimates.