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What Trends Are Shaping AI In Insurance This Year? 10 Experts Share Their Insights

  • 23 September 2019
  • Sam Mire

Insurance is the line between us and financial ruin, so doesn't it make sense to be aware of the trends most impacting the insurance industry? Whether it's medical, home, vehicle, or life, these experts let us in on the patterns and trends that could impact your policies in the near and long-term future. Here's what they said:

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

“We are witnessing relatively quick improvements and sparks of innovation, considering the overall life cycle of the insurance industry. AI and machine learning applications are being leveraged to streamline and better inform the decisions humans have to make. When this happens, workers become free to focus on the aspects of their jobs that matter the most. Organizations are seeing multiples of improvements in cost savings by increased efficiency, accuracy, and better predictions. Simultaneously, customer service and patient care have improved by providing answers and resources tailored to their particular case, in a fraction of the time that it used to take.”

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

Over the last few years, the use of AI in insurance has mainly evolved around fraud detection and process optimization – we believe that soon, it will be about personalized risk assessment.  

AI is less relevant if all products have similar pricing structures – to design a standard cover for a large risk pool does not require much technological assistance. However, often, individual risks and needs differ so much from each other that designing one-size-fits-all products does not have customer centrality at heart.

AI opens for the possibility to personalize risk assessment, meaning that risk exposure can be analyzed more precisely so that the right coverage will be offered right where it is needed. Personalized risk assessment ensures fairer prices and that previously underinsured and uninsured areas suddenly can be protected. An example of the use of customized risk assessment is the emergence of parametric insurance product where advanced technologies and new data sources are utilized to offer tailor-made solutions with instant payout.”

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

Insurance has always been, and likely always will be, a highly regulated industry. It’s also a crowded industry. There are a lot of companies out there offering all kinds of different insurance products. This combination presents unique challenges and opportunities for carriers – how do you differentiate when on the surface you and your competitors all look pretty much alike? Interestingly, the “digital native” insurers, who took a page or two from their eCommerce and ride share cousins’ playbooks, gave the whole industry a new way of thinking about competition. Don’t compete on price. Make what sets you apart the ability to deliver an exceptional policyholder experience. This, in my opinion, is the leading trend shaping how AI is being adopted by insurers.”

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

“The most popular trend shaping AI in insurance this year is the desire for many market participants to engage in efforts to leverage AI to benefit their business or their clients. Insurance is traditionally a conservative industry that is slow to embrace new technologies and changes. That’s changing as massive outside investments are coming into the insurance industry. We see this with many large agencies buying smaller agencies using private equity financing, and the significant venture investment coming into the InsurTech industry. Outside perspectives and leaders are coming into the insurance industry and leveraging their experiences in other domains to find creative ways to accelerate the adoption of technology in insurance. We also see many new business models being applied – for example, new insurance companies will reward you with lower prices if you give them access to your real-time driving performance.”

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

“Insurers are interested in AI’s applications in the claims process. The technology has advanced to the point where insurers now have the ability to identify crashes from data that is generated from smartphones and IoT. Sensing data, combined with machine learning, enables insurers can to reconstruct a crash to offer their customers a smoother claims process. Information is the foundation of the claims process, and generating that information from an unbiased witness makes it easier for insurers and their customers to navigate the entire process faster.”

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

“I see it split into 2 parallel trends, depending on a given carrier’s current state in terms of reserves and risk appetite. The first is using AI to offer a better user experience to agents and consumers. This could be through introducing more sophisticated chatbots or higher degrees of digital underwriting. The other trend is related directly to the carrier’s financials goals, in terms of both loss ratios and expenses reduction. I believe that carriers will seek more ways to incorporate AI into their quoting systems and underwriting processes.”

7. Christian Wiens, CEO of Getsafe

At the moment, insurance companies are increasingly automating processes, using robotic process automation, or RPA for short: Insurers use virtual robots rather than physical robots to relieve people of simple copy-paste tasks or similar work steps. The robots imitate the user behavior of humans with software. This is quickly implemented and inexpensive. Also, insurers begin to use rule-based algorithms such as chatbots.

However, the tasks are still limited to simple work processes. These include billing, changes of address data or bank details, the transfer of data to databases or the processing of termination letters. The virtual workforce is therefore not in a position to flexibly react to deviations, for example, if data is entered incompletely or incorrectly. 

What is needed is to use not only rule-based algorithms but rather an AI that can learn from large amounts of data to learn to carry out tasks without predefined rules.”

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

Carriers have an incredible amount of inbound documentation, both fax and hard copies. As a result, machine learning is currently one of the largest trends to combat data dump. 

When used during the document input state along with Optical Character Recognition (OCR), machine learning helps automate the data entry and indexing of documents to create a higher level of straight through processing. This creates efficiency along the entire lifecycle, including underwriting and claims. However, the biggest white space in AI for insurance is image recognition, which has many different applications that will ultimately expedite claims processing.”

9. Ryohei Fujimaki, Ph.D., Founder & CEO of dotData

“For operational efficiency, AI-based automatic underwriting and claims management will be two major trends that we will see in the coming years.

In customer relationship management, AI will be used more frequently to help profile customer behaviors, helping insurers to get a better and deeper understanding of their customers’ wants and needs. This, in turn, will help to drive revenue growth.”

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

“Tools that reduce the time and cost of claims processing and underwriting. Chatbots also should not be discounted. Almost all companies are moving to adopt Chatbots for customer service and sales. While there isn’t widespread adoption yet in the insurance industry, we expect it is coming to address a growing segment of the population that would rather text than talk.”

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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.