Other parts of this series:
Artificial intelligence (AI) in the form of cognitive computing and robotic process automation is opening up new horizons for insurers, making it easier to streamline and/or automate multiple processes and transactions. Insurers, however, need to place their AI bets knowledgeably and carefully.
For insurers, artificial intelligence – as represented by cognitive computing and robotic process automation — may be the single most disruptive emerging technology on the near horizon. Insurers, along with other businesses, will use machines capable of complex reasoning and interaction to enhance human capabilities. The potential gains in effectiveness and efficiency in areas ranging from underwriting to claims processing to risk management are enormous.
A number of converging elements have led to the rise of artificial intelligence. For example, there have been vast increases in the volumes of available data, with an estimated 44 zettabytes of data by 2020. The cost of storing large quantities of data has dropped precipitously, while the rise of the cloud has provided businesses with virtually unlimited computing power. There have been rapid advances in artificial intelligence technologies, reflected in part by the growing number of AI-related tech startups.
Basically, artificial intelligence allows insurers to gather unprecedented amounts of data from disparate systems and—by weaving systems, data and people together—create solutions that fundamentally change what they do and how they do it.
Insurers are starting to explore artificial intelligence use cases across the value chain. In sales, for example, they are exploring ways to identify the customer’s personality and analyze the tone of interchanges with the insurer. They are using AI to automate the creation of targeted marketing materials and promotions.
In underwriting, insurers are using AI to extract insights from supporting information. They are automating demand analysis and generating new product offerings. They are using AI in claims, as well, by putting robotic processing automation (RPA) to work in claims processing and in automating claims fraud detection. AI can help insurers understand and take automatic action in response to external emails and request, and to automate call centers and webchat services.
Clearly, carriers are faced with big decisions about using AI technologies. In my next few posts, I will be looking at some of the near- and longer-term implications of AI for insurers.