This article was originally published in the 2018 Summer PAMIC Pulse – The Pulse is a mutual insurance industry publication that aims to help companies understand emerging issues. Articles in the Pulse offer advice on how to grow and protect businesses. The impact of the Pulse reaches throughout the Mid-Atlantic states through readers from of PAMIC’s many member companies.
AI, or artificial intelligence, is the next big thing—and it’s everywhere. Were you a fan of The Jetsons, Star Wars, The Terminator, or The Transformers? For generations, people have imagined what life would be like with AI. While it isn’t quite as dramatic as a Hollywood film, AI is disrupting numerous industries, from retail to banking to health care. How can artificial intelligence help you transform, as a mutual insurance provider, to better care for your members?
The technology required for AI continues to become cheaper and more accessible, meaning that businesses seeking greater insights from their data are investing in AI at faster rates than ever before. Research firms have estimated that widespread adoption and investment in AI across various industries will increase from $8 billion in 2016 to more than $47 billion in 2020. Of this $47 billion in spending, the financial sector, which includes insurance, will account for $11.3 billion. Don’t want to hop on the AI bandwagon just yet? We’re going to change your mind…
Benefit #1: Streamline the claims process. The insurance industry may get a bad rap for its outdated processes and lack of new technologies, but this is beginning to change. Human claims handling is still important to have in order to maintain a personal touch business model. However, this also introduces the opportunity for human error, which can cause a claim to sit idly for a while. If claims have to go through multiple agents, processing time and handling costs can increase. However, new processes for handling claims is a hybrid approach; humans and—you guessed it—artificial intelligence (AI). AI leverages large amounts of data in a short time, fast-tracking certain claims and streamlining overall claims management. AI can be used at every step of the process, from reporting the claim to capturing damage reports and estimates, auditing the system, and communicating with the customer. This way, clients can easily file claims and have a shorter resolution time, even if an actual person isn’t available to help right away. Companies that have implemented claim automation have already begun to see reduced processing times, which can reduce claims costs and increase member satisfaction.
Benefit #2: Reduce fraudulent claims. Fraudulent claims cost the insurance industry approximately $80 billion every year. As an insurance provider, this can force you to increase premiums for your members or cut back on operating expenses to cover the costs of fraud. When you rely on agents to manually comb through reports, you can expect mistakes—agents are human. AI, on the other hand, uses algorithms to identify data patterns and quickly recognizes when something is fraudulent. The suspicious activity can then be stopped in its tracks before it costs you and your client’s valuable time and money.
Benefit #3: Conveniently communicate with customers. Chatbots, or computer programs that act as virtual assistants, are able to interact with customers using AI through natural language processing and sentiment analysis. While these chatbots have been used across a variety of industries, they’re a relatively new trend in the insurance business. Instead of being put on hold for hours or waiting for an email response, customers can now “talk” with chatbots on your website and get an immediate response. They can ask basic questions, clarify their coverage, resolve claims, and even buy products. This efficient process can increase customer satisfaction and overall loyalty, which is a win-win for your business.
Benefit #4: Market yourself competitively. Let’s face it, insurance is competitive. If you want to attract new clients and keep your current ones engaged, you need a strong yet adaptable marketing strategy. While insurance companies are notorious for cold calling (you’ll never reach millennials this way) or by implementing misplaced Facebook ads, AI is changing that. AI is able to pull and sort through massive amounts of consumer data, creating profiles for your ideal target market. With this information, you can better place advertisements and send more targeted surveys and emails. Non-targeted marketing is so 2010. AI takes a load off the marketing process by scanning already existing information in search of trends and patterns. So, it does the hard work but lets you bask in the glory. Are you sold yet?
Benefit #5: Give your customers what they want. The same kind of data that could be used to help you attract new members can also help you better satisfy existing ones. A study found that almost 80% of insurance executives think artificial intelligence will revolutionize the way insurers learn about their customers. Even more impressive? More than half of those executives believe the biggest benefit is being able to leverage that data for better customer insights. More important than learning about your customers is putting what you have learned to use. When you have access to the buying trends and preferences of your customers, you can personally tailor your services to match.
Now that you know some of the benefits of AI for mutuals, are you ready to leverage it for your business?