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Artificial Intelligence has garnered enough attention when it comes to solving real world problems and bringing humans closer to futuristic solutions.
As experts state, it is a field where machines try to interact with the world through intelligent agents. In the simplest form, AI helps stakeholders take decisions quickly or solve real world problems in an effective manner. Some of the known applications of Artificial Intelligence lie in understanding customer behavior, their purchase patterns, and their loyalty to the products they buy and services they use.
Let us throw some light on how it impacts various industries, precisely insurance.
Applications of Artificial Intelligence
Applications of AI are not limited to banking or retail but are spread out across multiple domains like travel, hospitality, utilities, consumer durables, and even insurance. The most known phenomenon within AI is to not just predict but be able to productionize AI components and use them in real time.
An interesting part to note about Insurance as a domain is about the solutions it already had before AI came into existence. Actuarial Science experts were able to deliver models and studies where they were able to decide prices and premiums for various insurance plans.
Little did they know that Insurance would be dealt with multiple challenges later around various consumer bases and interactions which happen post-purchase of insurance plans and when they claim it. Let’s know more about how AI has made insurance as a practice accessible and easy for people to consume.
AI and Insurance
Amongst all the industries that are witnessing a boom after conjugating with Artificial Intelligence, the insurance industry has been the oldest and perhaps the slowest to embrace technological upgrade. However, now, as Artificial Intelligence is catalyzing its growth, things are changing for good.
Artificial Intelligence has omitted the need for tedious paperwork and slow paper-based processes requiring manual efforts. Today, getting a new policy or claim reimbursed does not take much time, as the receivers get policies tailored to their needs.
Areas such as sales and marketing, risk assessment, and operations are sailing smoothly due to the intervention of Artificial Intelligence in their processes.
AI insurance for sales, marketing and operations
Insurers are using machine learning to gather data and then price their policies in a more competitive manner. The users now get only relevant and useful products that fit their individual needs, and subsequently, pay for what is required. It has generated a greater fondness for insurance amongst a large set of customers, who were once reluctant in buying insurance.
Insurance consultants and experts have not limited themselves in using AI to just decide the pricing strategy but also use it for operations, understanding customer experience, looking to optimize acquisition channels, and even know how to retain people when needed. When it comes to insurance products, there is a lot that a single individual can look out for, and hence, up-selling and cross-selling insurance products is another area where experts can look out for using AI in the best possible way. Recent reports from multiple insurers have revealed that when AI is used in the right way has helped them make an uplift in their revenue stream by 25-35%.
Risk assessment with AI
One of the areas where insurance companies found themselves at fault was in identifying fraud. Thanks to AI, now they can identify fraudulent claims and reduce debt for the insurance companies. With neural networks, insurers can spot fraud patterns and prevent themselves from entertaining fraudulent claims. Furthermore, with machine learning, insurance companies are now able to upgrade their risk and actuarial models to churn out profitable products.
With more and more advancements coming in the Artificial Intelligence and insurance industry increasing its consumer base, there is a lot more to see when it comes to AI solving challenges which the insurance industry faces.