Coverages tailored to individual’s requirements, premiums that change their value according to customer’s profile, policies that protect beyond national borders, applications that allow real-time ‘turn on’ or ‘turn off’ protection from a cell phone and digital channels that make it possible to subscribe to a temporary policy in matter of seconds.
These are just some examples of what the insurance industry is addressing if they want to stay current and relevant.
Digitalization of Insurance Companies – The need of the hour
Insurance is a sector that has become a key to the developed economies. and its future will depend on the ability of companies to adapt to the new global digital environment. Customers expect choice and simplicity when shopping and the flexibility that comes with digital solutions is becoming increasingly important. Satisfied customers will help companies grow faster, as this article on Insplanet shows.
The insurance industry is in the transition to the digital world, in which artificial intelligence is becoming increasingly prominent. Many are struggling with their IT heritage and have complex technical challenges to overcome. In addition, there is a need for a cultural shift where work processes become more customer-centric and decision-making more agile.
AI technology and Insurance
Insurance companies consume, use and store digital data daily. The flow of information has become immense, so the latest technology is required to process it and convert it into knowledge that can be put into practice. Artificial Intelligence is defined as the development of computer systems capable of performing tasks that usually require human intelligence. Its added value is in the capacity it has to learn patterns and with them to project scenarios in order to measure and prevent latent risks.
AI provides benefits for the Insurance industry
Insurance companies can assess risks more accurately, reduce operating costs and offer a better experience to their users with the help of artificial intelligence. Not only has the banking system benefited through Artificial Intelligence, but the insurance industry is also one of the sectors that can benefit most from it.
According to a report by Accenture, most insurance companies are still linked to a business model based on the creation of risk pools, the calculation of average prices and the generation of income through premiums, but this model will be increasingly threatened, as the Internet of Things, Big Data and Artificial Intelligence (AI) allow insurers to assess and quote risks directly and individually.
Are there any disadvantages of using AI in insurance?
While AI certainly offers many advantages, every coin does have a flip side. In this case, the high costs and unemployment are the two main drawbacks. That said, the advantages it offers certainly outweigh the disadvantages. There are many companies that are already using this technology.
An American insurtech called Lemonade has developed its business model through Artificial Intelligence, managing to insure its clients in just 90 seconds and giving claims in as less as three minutes with the help of robots; a case where we clearly see the optimization in function thanks to the AI technology.
Another example is shown by the Insurify company by launching Evia (Expert Virtual Insurance Agent), a virtual insurance agent that uses Artificial Intelligence so that the user can get the best insurance for their vehicle, from a photo of the license plate and some questions that it raises.
Based on the information obtained, Evia analyzes the possible policies with different insurers and sends the options that it considers most appropriate for the person.