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How Artificial Intelligence Is Transforming the Insurance Industry

By July 17, 2023No Comments

The insurance industry is currently undergoing a digital revolution, and insurers can improve customer experience (CX) and streamline operations by automating processes and analyzing data. The good news is that there’s something for every insurance agency, from generative AI to predictive analytics.

Though exploring AI for your business might sound challenging, those who find the best opportunities and harness the power of AI to operate better now will emerge as the industry leaders of tomorrow.

Here are some key benefits of AI in insurance that illustrate how artificial intelligence can become integral to your customer experience: 

  • AI can help insurers assess risk, detect fraud, and reduce human error in the application process. As a result, insurance companies are better equipped to help their clients choose the most suitable policies.
  • AI allows for more efficient service and claims processing which greatly benefits customers.

To better understand, artificial intelligence is an umbrella term for a diverse set of tools and methods, such as predictive analytics, machine learning, and natural language processing. These advancements enable computers to gain knowledge and proficiency through trial and error.

By engaging with more people and learning from their responses, a customer service chatbot, might improve the quality of its interaction over time.

A study by McKinsey & Company found that by adopting AI, insurers may cut costs by 40% by the year 2030. Furthermore, studies have shown that customer satisfaction can rise by as much as 20% when AI is used to power the insurance experience. Moreover, a study by Salesforce found that more than 60% of customers say they’re open to AI being used to improve their experiences.

Insurance companies may better meet the demands of their customers by using AI to analyze client data and make recommendations and adjustments based on that information. AI can also generate marketing campaigns or offers that are more likely to provoke a positive response from customers, and it can segment audiences by an overwhelming number of characteristics. Agents can utilize AI to make contact with customers in a highly personalized manner without taking on additional work as a result of the automation involved.

Insurers can benefit from AI by improving the accuracy of the claims process. AI may identify potentially false claims by analyzing data from a wide variety of sources, including images and videos. Computer vision algorithms not only assist in speeding up the claims process for consumers—which means insured customers can receive claims checks sooner thanks to AI-powered claims processing—but they also improve efficiencies and reduces costs.

Chatbots and virtual assistants powered by AI can give around-the-clock assistance to clients by answering their inquiries and fixing their problems. In addition to enhancing CX, this has the potential to decrease the load on support staff. Notably, virtual assistants do not require a visible user interface. By integrating with voice technologies like Amazon’s Alexa devices, for example, insurers can reach clients outside of the context of their website, customer portal, or mobile app. In addition, virtual assistants make round-the-clock service possible (a first for many insurance providers) so clients’ access to help is not restricted.

Customers’ evaluations of businesses are shifting to include their level of digital maturity as technology progresses. According to recent studies, if an insurance company lacked basic digital capabilities, more than 40% of their clients would look elsewhere.

The difficulty of putting a plan into action is often underestimated. Insurance companies must take many measures, including the following:

  • Determine which parts of their CX procedure—including claims handling, customer service, and product customization—will benefit most from the use of artificial intelligence.
  • Verify that your data storage and collecting methods are enough to unleash AI’s full potential.
  • Select the best AI technologies for the project.
  • Invest in staff training (and potential expansion) so that people using AI technologies can do their jobs well.

Do you have concerns about this cutting-edge equipment? Nesbit has a team of experts ready to assist you.