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What Benefits Could AI Bring To Insurance? 10 Experts Share Their Insights

  • 29 September 2019
  • Sam Mire

Insurance is a numbers-heavy industry, and we've seen that many statistics-dependent sectors could benefit from AI. But implementing AI is far easier to say than do. Will the potential upside that AI promises be worth the investment? These industry insiders outlined the potential benefits of AI, which will be critical in determining AI's impact on insurers. Here's what they said:

1. Scott McConnell, President of Insurance for NTT DATA Services

At the end of the day, it always comes down to cost reduction. Unless you are a progressive company, costs are the anchor of every business case when implementing new technologies.

A better customer experience, improved underwriting and enhanced identification of fraud (which can reduce potential lawsuits) are all benefits of AI, but the reality is, most of our clients are focused on the impact to the bottom line. Not that these other benefits are less valuable, but in terms of current maturity levels in applying AI, the insurance industry is not as advanced as it needs to be.”


2. Jeremy Jawish, CEO & co-founder of Shift Technology

AI is all about making better decisions, faster and with greater accuracy. Applied in the right way, AI lets you see the connections between vast amounts of often disparate data and information. This is critically important in the area of fraud detection, but certainly applies to many other aspects of the insurance industry as well, from claims automation to underwriting to new product and service offerings.”


3. Ji Li, Director of Data Science at CLARA analytics

“The wealth of available data fused with the unstructured data can be leveraged to get claimants the services they need right away, while reducing the overall costs to insurers. AI enables insurers to spot unusual patterns that a human might miss, potentially helping to reduce these huge sums as well as customer premiums.”

 


4. Christian Wiens, CEO of Getsafe

The potential for the use of artificial intelligence is enormous: many customer inquiries, damage reports or data analyses could theoretically be standardized and automated – ideal prerequisites for using intelligent machines.”

 


5. Tanguy Touffut, co-founder and CEO of Descartes Underwriting

Undoubtedly, the most significant benefit AI brings to insurance is better coverage. AI will enable better analysis of emerging and existing risks, which facilitates the protection of underinsured populations and areas that have not been insured previously.  AI-powered parametric insurance, for instance, offers fairer products to protect people against natural catastrophes — for example, hail products for vulnerable farmers or instant-payout coverages against earthquake threats. Tailor-made AI insurance products are a crucial parameter for providing insurance products that can safeguard livelihoods in the face of climate change.”


6. Chad Hawkinson, Senior Vice President, Data & Analytics at Vertafore

“It’s too soon to say what will be the #1 benefit that AI brings to insurance. Likely the biggest benefits will be in automation and improving the ability to properly price risk. Many processes are paper-based and leverage traditional processing methodologies. The application of machine learning and natural language processing will allow the industry to digitize many of these paper-based processes, enabling processes to be automated and streamlined, as well as surface data that will allow the industry to constantly find ways to improve their operations. Given the insurance industry exists to mitigate risk, with the traditional actuarial approach to assessing the correct price of risk, the influence of AI and data analytics will certainly help the industry better price and manage risk. Additional data sources such as the social media example above, combined with heuristics and machine learning will help improve the industry’s ability to manage this risk.”


7. Amir Cohen, co-founder and CTO of Planck

“The AI landscape is way too broad to talk about a single benefit. Over the long run, this is a real game-changer; there are many possibilities to increase GWP and reduce loss ratios. AI is going to bring the market much closer to the holy grail where all incumbents pay the exact premiums they need and, when valid claims (unfortunately) happen, they are paid as soon as possible.

This will happen either from the onboarding perspective, with intelligent bots that can precisely understand the requirements of a business owner, from the underwriting and actuarial perspective, where newer and better models will appear,  or by enhancing user experience during the policy lifetime by combining the two topics together with real-time monitoring.”


8. Dan Peate, CEO and Founder of Avinew

“Currently, a vast number of humans are required to be involved in insurance transactions to make judgment calls and decisions. It’s what makes the buying, claims, and underwriting process so long –  a human always has to be involved. If AI can replace a good percentage of the human interaction that’s currently required in the chain, then the speed of transactions will become unbelievably fast. This is where AI, as well as blockchain, come into play. If you were to have an insurance company that utilizes both AI and blockchain to their full potential, transactions that once took days or weeks would be reduced to taking minutes or even seconds.”


9. Saty Mahajan, co-founder & CTO of Bento

“AI has the potential to transform and benefit the insurance industry in multiple ways. The most obvious areas it can be used include claims processing, underwriting, fraud detection and customer service. Ultimately the primary benefit across all of these areas is to reduce costs, reduce errors, and improve the overall experience to every party involved.”


10. Ryan McMahon, Vice President of Insurance at Cambridge Mobile Telematics 

“The number one benefit is better service to customers. Most of AI is behind the scenes – improving the systems and processes that insurers use to run their business. There
are applications across the industry, but the bottom line is that the more efficient insurers become, the better the pricing and more seamless the process will be for consumers.”

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About Sam Mire

Sam is a Market Research Analyst at Disruptor Daily. He's a trained journalist with experience in the field of disruptive technology. He’s versed in the impact that blockchain technology is having on industries of today, from healthcare to cannabis. He’s written extensively on the individuals and companies shaping the future of tech, working directly with many of them to advance their vision. Sam is known for writing work that brings value to industry professionals and the generally curious – as well as an occasional smile to the face.

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