Leveraging AI to streamline insurance operations and enhance customer experience

The rapidly changing digital landscape and disintermediation of the value chain in the insurance industry has made it imperative for companies to mainstream AI in their strategic business initiatives. AI involves automating the cognitive tasks of thinking, perceiving, decision making and problem solving that usually require human intelligence. AI is leading the change in insurance business from being a mere ‘Facilitator to Predictor’ of ‘life and non-life events’.

To provide relevant and personalised experiences that are required to meet the demands of the digital savvy customer, incumbents in the insurance industry are reimagining the customer’s insurance life cycle using AI to provide tangible and real life business solutions. They are working to create solutions aiming to solve issues of evolving customer expectations, decreasing loyalty towards brands and competing with the disruption brought by challengers.

There is a need for insurance companies to have a focus towards providing user-centric and empathy driven experience for their customers. A lot of emphasis has to be on moving from an elementary automation to cognitive decision-making. Some of the AI solutions that hold potential when embedded in the business functions, are deep learning, NLP (Natural Language Processing), text and video analytics.

Leveraging AI to improve the quality of services is how insurance companies can tackle the competitive marketplace. Some of the emerging use cases which we have seen in implementation are conversational AI solutions that are widely used for making customer interactions predictable and automated. Incumbent players are making effective use of AI chat-bots to tackle frequently asked queries, management of complaints, initiation of claim transactions and transition to a human customer service agent. The potential of technology is also being explored by insurance players for targeted recommendations and product selection. Several insurance players are today using text analytics and natural language processing techniques to perform structured feedback analysis in traditional channels.

New AI-based frameworks for fraud and risk analysis are helping to automate fraud investigation during claims processing and reducing the cycle time. Another area where we see growing interest is on image and video analytics, which can act as an effective tool to analyse damage severity based on photos, taken by customers, during claims reports to improve speed and convenience. E.g. Some Asian AI players are utilising image recognition and remote video technologies at scale, to realise faster claim settlements by creating dynamic location grids - thereby decreasing the expense ratios by lowering the need for physical inspections.

However, Indian players have a long way to go in terms of coupling conversational AI and other traditional customer service channels, to provide a friction-free experience for customers and a single window for effective customer service.

There is no doubt that AI has the potential to transform the way insurers run and grow their businesses however, it is imperative for insurance companies to first decipher their customers’ varied needs. There is a need to either develop in-house capabilities or form partnerships with fintech players to leverage this technology. Such symbiotic collaborations will provide opportunities to deploy AI technologies in insurance functions and mature from using AI in low impact rule-based processes to high impact cognitive and predictive processes. It is high time for insurance companies to put data into action by experimenting with AI and ensuring interoperability of AI-based solutions across the organization.

All in all, AI has the potential to transform the way insurers run and grow their businesses. There is a need to either develop in-house capabilities or form partnerships with fintech players to leverage technology. Such symbiotic collaborations can provide opportunities to deploy AI technologies in insurance functions and mature by using AI in low impact rule-based processes to high impact cognitive and predictive processes. The time is now ripe, for insurance companies to put data into action by experimenting with AI and ensuring interoperability of AI-based solutions across the organisation.