Artificial Intelligence and machine learning: 4.0 impact on insurance companies

80% of executives believe that AI will revolutionize the way companies will proceed to acquire information from their customers. Over half of the companies surveyed said that the biggest advantage will be to exploit better data to have a better understanding of customers

Published on 16 Jan 2018

Insurance sector is based on good data management. What is changing, compared to the past, is not only the huge amount of data managed. The difference is given by an Al that helps companies to process all this information releasing new products and services. Today there are automatic systems, capable of intercepting different groups of data, analyzing and preparing them to help implement increasingly customized offers. There are tools that manage to group a series of different information, launching simulation programs that can give a predictive framework in the short, medium and long term, supporting decision makers in evaluating the modalities of contracts linked to one or more policies. The most advanced sensors support new methods of control and surveillance, tracing in real time environments, things and people, thus helping to measure anomalies and to record the criticalities on time. Increasingly sophisticated algorithms, self-learning systems, telemetry, chatbot already give life to a new level of automation that enhances the management of the information chain.

The role of artificial intelligence in the insurance industry

Emulating human thought for a machine seemed, until some time ago, science fiction. Today Artificial Intelligence is a science made of consolidated technologies, even if it is difficult to limit the application areas and the terms of development, being in continuous evolution. The computing speed of computers and the amount of integrated and advanced management systems continue to change the times and the ways the machines learn but also the way they interact with us. Thus, if the quantity of information managed remains at the basis of the processing capacity, the sophistication and specialization of the algorithms underlying the systems of analysis and interpretation make the difference. These allow to quickly associate and analyze information through variable combinations that lead a computer not only to understand, but also to decide, based on available information, which choices may be more appropriate.

“The insurance sector bases its business on data analysis and information projection over time – underlines Bernard Marr, international strategic consultant and essayist of several best sellers as well as author of several articles published in various newspapers including Forbes, The Times, The Guardian, The Financial Times and the Wall Street Journal -. This is why AI is a strategic asset for development, transforming the quality of the organization and services offered by the companies. 80% of executives consider that artificial intelligence will revolutionize the way insurers acquire information from their customers and more than 50% said that the biggest advantage will be to exploit better data to better understand customers”.

From insurance advice to transaction management, from the help desk to CRM, there is no area excluded by the strong influence of new digital tools. Think of the development of the so-called chatbots applied to online help desk systems.

Insurance advice and customer service

Chatbots, working as messaging applications, have started to be used in insurance companies to handle complaints and answer simple questions. Today the level of sophistication has become such that potential applications have become much wider.

New generation programs, in fact, allow the machines to use the same communication systems as human beings, even succeeding in interpreting the spoken language (the so-called natural language). The combination with AI algorithms and self-learning, allow machines to learn from past experiences, evolve and improve their accuracy in providing autonomous answers or services.

“According to a recent survey – Marr continued – most customers have no problem to interact with a bot. 74% of consumers said they would be happy to get insurance advice generated by a computer. The reasons laid down in the maturity of consumers and their level of expectation: today the orientation is aimed at personalized services and AI makes it possible, allowing to analyze customer profile in order to provide advice on the most relevant insurance products, based on pre-set criteria”.

Big Data Management, between analytics and self-learning systems

Business Intelligence applied to the insurance sector, thanks to an increasingly stronger integration of Artificial Intelligence and machine learning, is strongly modifying operations and results. Already in the first phase of negotiation with a client, when the consultant has to determine which type of coverage is most appropriate, the AI can play a key role in supporting the customer service. For example, analyzing customer’s life style on the social media, when such a customer is healthy and with a safe job, can allow the consultant to lower insurance premiums.

Another case is the combined use of telematics and wireless communications helping some insurance companies to apply new discounts to all those customers who can share their driving data. Telematics, combined with geolocation (GPS) and artificial intelligence, already allows to interpret important information on road conditions and traffic, being able to inform the driver with a predictive level able to help him avoid accidents. In future, the use of these solutions on a massive scale will make customers safer and more satisfied, helping companies significantly reduce their claim activities.

The use of smarter automation for help desk

Insurance industry, in addition to having to comply with stringent regulations and policies, is closely linked to its ability to process thousands of customer requests. Responding to the thousands of questions that come every day through increasingly multi-channel management, aligned with the multichannel evolution of customers is certainly an important asset of the company organization. To improve many of these processes, making them faster but also more functional, companies are now shifting part of their requests onto digital reporting platforms.

“This because many answers, in reality, do not require the added value of human interaction – Marr points out -. Automating some parts of the claim process means saving time but also offering greater quality of service”.

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