With customers prioritizing personalized services and user experience, insurance companies increasingly invest in artificial intelligence. A recent study highlights that the global AI in insurance market size is projected to reach approximately USD 79.86 billion by 2032.
AI in insurance allows insurers to customize and personalize their offerings, eliminate risks, and streamline processes that may otherwise consume a lot of time and resources. But these are not the only ways artificial intelligence is transforming the insurance sector.
Let’s delve deeper and explore 14 innovative use cases that showcase the vast potential of this technology for insurance service providers.
Use Cases of Artificial Intelligence in Insurance
Check out these AI use cases in insurance to understand how this technology is bringing disruption in the industry.
- Risk Evaluation
Artificial intelligence enhances risk assessment by eva35sr4luating enormous amounts of data to recognize patterns, such as historical claims, social media activity, etc. These insights help to predict potential risks, which is difficult to achieve with traditional insurance management solutions.
Swiss Re, a worldwide recognized insurance company, uses artificial intelligence to assess risks associated with life insurance.
- Policy Underwriting
Implementing artificial intelligence into the insurance sector helps with streamlining the underwriting process. AI automates data collection and evaluation, minimizing the time and resources needed to assess each application. AI, together with ML, can accurately analyze credit scores, lifestyle data, and medical history, assisting with policy underwriting.
A well-recognized insurtech company uses an AI-enabled bot to collate and evaluate applicants’ information, analyze risks, and offer customized pricing plans.
- Claims Management
Traditional insurance management systems make claims management a time-intensive process, requiring dependency on human resources. AI brings automation to accelerate the process and make it highly efficient and accurate. AI with NLP fetches required information from the claim applications and robotic process automation takes care of the jobs like data entry and validation.
Progressive Insurance, an American insurance company, utilizes AI for claims processes. Its AI-enabled system meticulously evaluates photos of motor vehicle accidents to automatically create a report providing initial assessment and accelerating the entire claims workflow.
- Customer Assistance Services
One of the common use cases of artificial intelligence is using it to offer customer support services. Like other industries, the insurance world also leverages AI to offer 24*7 assistance to handle routine inquiries, policy changes, and claim status notifications. The technology reduces response time, improving customer satisfaction and freeing resources for other crucial tasks.
GEICO, a leading car insurance company in the USA, has an AI-powered chatbot named Kate to respond to customers’ queries and assist them with various insurance policies.
To learn more about AI-powered chatbots, click here.
- Fraud Identification and Prevention
The insurance sector is prone to fraud; implementing AI can help with the prevention and identification of these frauds by analyzing patterns and anomalies in the claims. Artificial intelligence and machine learning have the self-learning capabilities to keep cyberattacks at bay.
A recognized Zürich-based insurance company uses this technology to find unusual patterns in the claims. Their AI system marks suspicious claims and experts further investigate them to minimize financial losses.
- Damage Evaluation for Claims
Artificial intelligence along with computer vision can automate damage evaluation by evaluating the images and videos shared by claimants. Automating the damage assessment expedites the entire claim process, guaranteeing fair settlements and enhancing user experience.
Tractable is a popular AI technology company that specializes in damage assessment of vehicles and properties by analyzing images. It uses advanced AI models and algorithms to estimate repair costs without manual intervention.
- Personalized Pricing for Insurance Policies
With the help of artificial intelligence, insurance businesses can bring personalization to insurance plans. The technology can go through individual risk profiles to identify parameters like driving behavior, health records, etc., to tailor policies depending on each customer’s risk level.
Metromile, a well-known car insurance company, utilizes AI to set personalized pricing based on the data collected via a telematics device. The technology helps to create fairer pricing and enhanced customer experience.
- Automation of Insurance Processes
Artificial intelligence automates insurance-related operations, such as data entry, policy administration, and compliance reporting. The technology can also be used to automate sales-related operations, resulting in better sales and reduced effort. It minimizes the overall cost and resource utilization while enhancing operational efficiency and accuracy.
A company named AXA leverages artificial intelligence to automate document processing, data management, and other critical insurance-related tasks to streamline workflow and enable employees to focus on other strategic activities.
- Predictive Insights
Enabling insurers to anticipate future insurance trends and market risks is one of the greatest use cases of AI in the insurance domain. AI-powered apps or solutions do this by analyzing historical data and present market conditions. Predictive analytics also help to make informed decisions for setting policy pricing, ensuring seamless risk management, and easy product development.
Using AI for predictive analytics in the insurance sector is helping a global insurance company assess risks related to natural disasters and emerging markets.
- Vehicle Damage Analysis
There was a time when insurance companies had to send their professionals to the accident locations to analyze the damage to the vehicle. Thanks to artificial intelligence it can now be done merely by uploading photos to the AI-powered insurance systems or apps.
Such systems or apps can analyze the damage from the vehicle photos and provide instant repair cost estimations. Automating this process expedites the claims processes, minimizes disputes, and improves customer satisfaction.
An American company named Liberty Mutual does the same by enabling insurance holders to upload vehicle damage images to the app and request claims.
- Specialized Policies for Professional Drivers
Integrating artificial intelligence can also help insurance companies create specialized plans or policies for drivers of Uber, Lyft, and other ridesharing service providers. The technology can help to monitor their driving behaviors and risk profiles and suggest customization in the plans.
Root Insurance, a famous car insurance company in the United States of America, leverages AI and telematics data to offer specialized insurance policies to rideshare and delivery drivers.
- Behavioral Policy Adjustments
With AI, insurance companies can monitor policyholders’ behavior, including driving skills or health-related activities. Based on the insights, they can dynamically adjust policy premiums. It promotes safer behavior and healthier lifestyles.
Many global insurance providers utilize artificial intelligence to track policyholders’ behavior through wearable devices. They also give them rewards or decrease the premiums to continue doing the same.
- Remote Property Inspection
This is probably a novel idea that only limited insurance companies are using. With the help of AI-powered drones, insurance service providers are doing remote property inspections, mainly in areas that are difficult to access or reach.
An American insurance company called, State Farm, uses AI drones to remotely inspect roofs and evaluate property damage after a natural disaster.
- Customer Retention and Churning Prediction
By analyzing customer behavior and interactions, artificial intelligence can predict customer retention and churning. While observing the customers’ behavior, the technology looks for patterns associated with dissatisfaction. Based on the insights, insurance service providers can take proactive measures or offer incentives to avoid churning.
Many leading insurance companies across the world are using AI to look into customer feedback or engagement to intervene before they switch to another provider.
Apart from insurance companies, other businesses are also using AI for personalization, customer support, and other benefits. If you are curious to know, read this blog: How Businesses are using Artificial Intelligence Currently?
How to Implement Artificial Intelligence in Insurance?
Implementing artificial intelligence in your insurance business requires identifying the pain points or areas that AI will address or improve. The next step is to decide whether to build an AI-powered solution from the ground up or integrate this technology into your current infrastructure.
No matter your choice, it is better to seek professional AI development services from an experienced technology company. But before connecting with an AI development company, ensure the following:
- Define clear business objectives and unique AI project requirements.
- Conduct thorough market research to find the list of AI development companies or hire AI developers.
- Evaluate the companies based on their experience in AI development, types of projects they have delivered, clientele, project management approach, and a few other parameters.
- Set up a consultation call with the shortlisted ones.
- Connect with the best AI development partner who understands your unique AI development project needs and commits to fulfilling the same within the given time without compromising quality or security standards.
- Ensure the company offers end-to-end AI development services, from design and development to launch and after-launch support.
Conclusion
Insurance companies investing in artificial intelligence is not just a technological upgrade; it is a transformation of how the entire industry works. Beyond common uses such as risk assessment or portfolio evaluation, the technology can be used in many innovative ways that some of us can only imagine. This blog covers all those unique ways in which AI can revolutionize the insurance domain.
While the technology has immense potential, it requires an insurance service provider to connect with a professional AI development company to utilize AI to its maximum for their business benefit or to deliver an unparalleled user experience.