Technological advancements are continuing to transform the way we live, work, and get insurance. The insurance industry is being disrupted by tools designed to improve efficiency and accuracy; this evolution has been dubbed insurtech, and startups across the country and globe are implementing AI into their insurance coverage process.
One of the biggest benefits for utilizing artificial intelligence in the insurance sector is risk mitigation. Computers can scour through data to make more informed decisions in seconds.
Keeping reading to learn about how artificial intelligence is improving processes in the insurance industry.
What is Artificial Intelligence?
To understand how AI is transforming insurance it’s important to understand what artificial intelligence is and the many ways it can be beneficial in risk mitigation.
Artificial intelligence is a technology that helps computers solve problems and think rationally, similar to how humans make decisions. Computers can scour through tons of data to make a rational decision based on facts and critical thinking way faster than a human ever could.
Two of the most popular sectors of AI are deep learning and machine learning. Machine learning predicts outcomes and weighs risks by analyzing data to find trends and predict future outcomes. For example, a car insurance company could use data around specific age groups and genders to predict driving patterns.
Deep learning improves speed and efficiency by teaching computers to lead by example. Artificial neural networks help computers complete tasks that human workers would normally accomplish, allowing workers to focus on more high-level tasks and spend less time on repetitive ones.
Artificial Intelligence and Insurance
AIs main goal is to teach machines to make trusted, accurate decisions that are free from human error. This makes insurtech especially valuable to insurance companies who can save big by predicting outcomes and identifying risks.
Here are some of the ways insurtech companies are utilizing AI today:
- Automated underwriting
AI is improving speed and efficiency in consumer insurance through automated underwriting. This is speeding up the claims process by having customers file claims directly online rather than talking to an insurance agent. Users can submit photos of an accident and the automated underwriting software can assess damage cost instantly. Other features of automated underwriting include built-in claim tracking and reporting. SAAS software makes this possible, paper-less, and free from human error.
- Preventing Fraud and Blocking Hacking
Insurtech is also helping prevent insurance fraud. The FBI estimates that approximately $40 billion is stolen through insurance fraud each year, which in turn actually raises all customer rates while also impacting business costs. AI can track irregular customer behaviors and claims to identify fraud in real time. The technology can also help block hacking.
- Adding Personalization to Solutions
No two accidents are ever the same. Insurtech allows carriers and customers to personalize their solutions. If someone had a bad driving history but has since changed their behavior, they can request an AI tracking application to analyze their driving and then generate a rate based on current behavior. Safe drivers would be less risky to insure and be charged a lower rate.
- Offering 24/7 Accessibility for Customers
Another thing that artificial intelligence can provide is 24/7 access without having to employ 24/7 staff. Accidents can happen anytime but chat box software allows customers to get information (even at 3 a.m. on a Monday) without having to get an agent on the line. This allows insurance companies to provide around-the-clock value while saving big on staffing costs.
Artificial intelligence allows insurance companies to make faster, more informed decisions while also speeding up their processes, all to the benefit of the customer. Accurate risk mitigation ultimately gets customers more accurate rates and helps insurance companies save.
To learn about the startups that are utilizing AI to transform the insurance industry check out the infographic from The Zebra below!
3 ways how leaders can adapt to the changing landscape by AI
Today, Artificial Intelligence (AI) is everywhere. It is breaking boundaries and pushing the limits across every industry. It is changing the world around us and significantly impacting our professional lives.
AI is drastically transforming business functions — manufacturing, logistics, finance, operations, customer support, etc. — and is opening doors for new jobs. It is also broadly reforming all business stakeholders’ job roles — including frontline executives, C-suite executives, vendors, suppliers, distributors, and customers.
When technology has such massive potential, how can companies remain oblivious to it?
We are going through the Industrial Revolution 4.0 that will transform the way we work forever. Many scientists and business gurus predict that this revolution will have a more significant impact than the internet revolution of the ’90s.
If you look closely, then you will realize that what they say is true. The following points illustrate the differences in a tabular form.
|Internet Revolution||AI Revolution|
|1. Encouraged human-to-human collaboration.||1. Is encouraging machine-to-human collaboration|
|2. Video conferencing, emails, and social media are the three best examples of the Internet revolution.||2. Virtual Reality (VR), Augmented Reality (AR), and Mixed Reality (MR) will revolutionize human-to-human collaboration forever.|
|3. Allows managers to send and receive timely notifications and alerts.||3. Allows managers to analyze reports and enables them to base their strategies on data.|
|4. Allows managers to allot tasks to their team members.||4. Allows managers to monitor the performance of their employees and provide corrective action.|
|5. Allows the support team to provide help to customers via phone, email, and call.||5. Allows the support team to install chatbots that gather essential customer information and provide answers to trivial questions.|
|6. Allows employees to work from remote workstations and serve customers from geographically distant places.||6. Allows the company to install Robotic Process Automation (RPA) that performs functions quickly without human intervention.|
|7. Gave rise to new jobs such as data entry, form filling, payroll management, etc.||7. Is automatizing trivial jobs. AI is thousand times efficient and a million times faster than humans. It also eliminates human errors.|
|8. Collates business-centric information in a single repository and provides access to all business stakeholders.||8. Not only collates information but also finds out patterns, structures, and errors in data.|
The above table lists 8 reasons for how AI is transforming businesses globally. AI will find more applications in the coming times, and leaders need to be ready to welcome them.
Let’s look at 3 ways how leaders can adapt to the changing landscape by AI:
1. Jobs are transforming at a fast pace
Every business has to comply with government regulations and has to keep the customer’s interest in mind. This gives rise to specific trivial jobs that eat up the employees’ time, such as form filling, collecting customer data, creating reports, data entry, payroll management, etc.
The Internet revolution of the early ’90s gave rise to such jobs. The economy improved by leaps and bounds as employment opportunities rose exponentially. But companies realized that humans have a downside as well. We aren’t good at maintaining records and are prone to making errors. In some cases, companies made heavy losses due to human errors. But due to the lack of any suitable alternative, they had no choice.
With the emergence of AI, companies have to bear the negative consequences no longer as it can handle trivial jobs efficiently and eliminate human errors. Realizing this advantage, companies are investing heavily in RPA and other software such as Enterprise Resource Planning (ERP) systems and Customer Relationship Management (CRM) systems. ERP systems, such as Sage 300Cloud, is helping companies manage business-critical operations like manufacturing, logistics, finance, supply chain relationships, and inventory management at the click of a button. CRM software like Sage CRM allows companies to instantly resolve customer queries, strengthen customer bonds, manage payroll management, and easily monitor employees’ performance.
As jobs’ nature is changing, managers need to keep an eye on the corporate world’s new realities. AI is revolutionizing yesteryear jobs, and companies need to be quick in transforming their functions. Even a small delay can degrade their status from leaders to laggers.
2. Conduct periodic training sessions for your employees
Training is a necessary element for all employees. It allows them to understand the changing demands of the industry and enables them to upgrade their skills. Gone are the days when a college degree guaranteed a managerial post. Today, if you don’t polish your skills, you will be shown the door.
In the cut-throat competitive world we live, it’s essential to hold training sessions for your employees and upskill them. Failing to do so will make your workforce obsolete and negatively impact the overall functioning of the company. For example, AI has made all the front desk jobs redundant. You no longer need a human to sit on the front desk and answer people’s questions. An AI can engage with thousands of callers simultaneously and provide them solutions. This helps the company to serve more customers and also save money.
But sometimes a chatbot doesn’t know what to do. In such conditions, it forwards the query to its human counterparts, who then take up the issue and provide unique solutions or recommendations.
This is where training plays a significant role. You will have to train your support service team to handle chatbots. They should have working knowledge of programming chatbots and employing troubleshooting algorithms when required. This strategy will increase the productivity of the employees and allow them to focus on issues that require human ingenuity, emotions, and intelligence, such as:
a. Brainstorming marketing strategies
b. Building target segments
c. Creating niches
d. Charting financial plan
e. Designing a Vision, Mission, and Values (VMV) statement
f. Studying competitors
3. Planning for the future
Forecasting the future requires a strong foundation on data to help the management team understand the changing business landscape. A combination of logic and creativity is essential for estimating how the industry shapes and performs in the future.
AI provides a fertile ground on which companies can build their bases. Other technologies, such as Machine Learning, Web Application, Neural Networks, Data Analytics, etc. also play a crucial role in carefully analyzing the market.
It also provides a blueprint that allows companies to allocate resources optimally and use them judiciously. The COVID-19 pandemic has displayed how useful AI and related technologies are. They have breathed new life into businesses. By integrating AI with ERP and CRM systems, companies have been able to do the following:
a. Retail stores suffered a massive loss in footfalls. AI helped them set up online portals, segregate customers based on their needs, wants, and wishlists, and thus increase demands.
b. Non-COVID patients were discouraged from visiting clinics. AI allowed doctors to provide primary healthcare to patients remotely. It also sends timely reminders regarding medicines, healthcare articles, and allows patients to arrange one-to-one sessions with doctors.
c. AI-enabled ERP systems check the inventory levels from time to time. As soon as the number of raw materials falls below the set threshold level, it automatically places orders with the vendor.
d. Since social distancing is the only way to avoid contracting the virus, the accumulation and disbursal of products in/from the warehouse have become a problem. AI-enabled ERP systems control robots that help in storing and moving products from point A to B smoothly.
e. Companies are finding difficulties in serving their customers appropriately as public transport facilities have either shut down or are not functioning at their optimum level. AI-enabled CRM systems have come as a boon. They are enabling the support team to provide top-notch services through video-conferences and calls.
f. AI-enabled CRM systems also record each customer’s specific details and suggest ways to effectively deal with them.
The AI revolution is creating ripples in the business landscape. The customers’ aspirations, stakeholder relationships, transaction procedures, and support processes will undergo a massive transformation. You cannot survive without incorporating AI and related technologies in your business blueprint in times of cut-throat competition.
Managers need to revamp their business processes and mold themselves according to the changing times. This article will enable managers to focus on the three main points — The changing nature of jobs, the importance of conducting periodic training sessions, and forecasting a good plan for the future — and help them make winning strategies for their business.
About the Author:
Nishant likes to read and write on technologies that form the bedrock of modern-day and age like Web Apps, machine learning, data science, AI, and robotics. His expertise in content marketing has helped grow countless business opportunities. Nishant works for Sage Software Solutions Pvt. Ltd., a leading provider of CRM and ERP Application to small and mid-sized businesses in India.
Perspectico Launches AI-based Job preparation platform for college graduates
The spread of the novel coronavirus has interrupted how graduates were preparing to enter the job market. Uncertainty about job opportunities and disruption to regular routines has led students to a stressful job search. To provide ease to students, Perspectico, an edtech startup launches AI-Based job preparation platform for college graduates. With this launch, the startup aims to create a positive job ecosystem for 2cr college students.
Launching the AI-Based Preparation Platform, Nikhil Chainani – Founder; Perspectico commented, “With our research &development we have seen that college graduates when looking for a job becomes very confused as most of the job platforms are scattered. Keeping this in mind, we built this common tech platform that will help not only have all the details on job opening but it will also prepare them to find their right job thus providing the right direction & guidance so that they can shine in their respective careers.”
This job preparation platform is India’s first relevant and guided job preparation tool. This will help the students with all the recommendations and evaluation which is required to get fully prepared for the job market.
The highlight of AI-based the platform is that it provides a market place for job openings across India to the college graduates on a real-time basis. In case students profile is not suitable, the AI Engine recommends the online course to improve their areas that need attention. A student can also undertake a self-evaluation test to measure competencies. These tests include subjective, MCQ &Situational test.
In addition, students are provided with Preparation materials, in-house courses, mentorship and interview guidance.
FICO Survey: Only 30% of Taiwanese Banks Believe AI Will Stop More Money Laundering
- Only 30 percent of Taiwanese banks believe AI will stop more money laundering.
- 78 percent of Taiwanese banks still believe in older rules-based technology for AML compliance, despite 26 percent saying that they experience significant struggles modifying these systems.
- In Taiwan, 83 percent of banks said they will invest in financial crime compliance in the year ahead and 9 percent plan to significantly increase this investment in 2021.
A recent survey by global analytics software firm FICO has revealed that only 30 percent of Taiwanese banks believe AI will strengthen anti-money laundering efforts, showing they are yet to be convinced of the benefits and that many remain unsure how to operationalize the advanced technology.
Conversely, when asked about the efficacy of much older rules-based technology, 64 percent of Taiwanese banks say they still believe in the ability of these AML systems, despite 26 percent saying they experience significant struggles modifying them.
“Rules-based compliance systems continue to the be the workhorse for banks in Asia Pacific when fighting financial crime,” said Timothy Choon, FICO’s Financial Crimes Leader in Asia Pacific. “While the majority of Taiwanese banks are still skeptical, a growing number of early adopters are actively exploring and testing the new world of AI and realize that the decade-old rules-based systems can’t keep up with sophisticated threats on their own.
“The secret sauce is operationalizing advanced AI technology and making it work side-by-side with the rules-based systems. In fact, 20 percent of respondents picked this as their principal obstacle in meeting financial crime risk mitigation targets.”
The survey showed that the key challenges for existing AML compliance solutions regionally were: the ability to meet new types of compliance risks in channels and products; the capacity to provide an end-to-end integrated compliance solution; and the facility to update quickly to changes in regulation.
Across Asia Pacific, larger multinational banks were more likely to use a vendor solution for AML, while the use of an in-house system was more common with domestic banks.
Key drivers of financial crime strategy
One of the leading indicators driving change in financial crime strategy is customer experience. Over two-in-five respondents ranked this in their top considerations with 17 percent of Asia Pacific banks citing it as the primary factor behind their current and future approach.
“We can see that addressing the competing needs of regulatory compliance and customer experience remains a balancing act for most institutions,” said Choon. “Banks are challenged by the need for more information to deal with high rates of alerts from ineffective systems, while not vexing customers with incessant due diligence questions.”
Additional considerations ranked second and third by banks included, reputation damage and direct financial losses. When it came to financial crime challenges almost half of respondents cited the speed of responding to new threats, while a third believe achieving accurate detection remains a significant test.
Investment in compliance technology
A significant majority of banks (93%) across Asia Pacific are likely to continue their technology spend on either upgrading or enhancing their compliance systems. However, in the key regional financial centres of Singapore and Hong Kong only two-thirds of respondents indicated that their banks are likely to start new investments in compliance technology, likely due to their more significant spend in this area in recent years.
In Taiwan, 83 percent of banks said they will continue to invest in compliance in the year ahead but only 9 percent plan to significantly increase this investment in 2021.
Overall levels of investment in compliance technology by banks in Asia Pacific are expected to rise in 2021. 49 percent of respondents said budgets will increase, with an additional 34 percent expecting a significant increase. Interestingly, foreign banks are more inclined towards new spend compared with domestic counterparts. Indonesia, Australia, Thailand and the Philippines were the markets that said they would invest the most in 2021.
“This survey, conducted in May, shows that even in the recent economic downturn triggered by the pandemic, banks remain committed to targeted spending that boosts their AML compliance defenses,” said Choon. “There is an increased willingness to perceive compliance and fraud as a common financial crime risk – a fraudster is more likely to launder money, and vice versa.
“This convergence is a global trend. Banks in the US and UK are well on their way to fully integrating their compliance and fraud functions, bringing together teams, leaders and technologies. We believe banks in Asia Pacific are looking to these markets to see what will work, with plans to follow quickly in the next 24-36 months.”
FICO’s Integrated AML Compliance Survey was produced in May 2020 using an online, quantitative poll of 256 senior executives from banks across eleven countries carried out on behalf of FICO by an independent research company. The countries surveyed were Australia, Hong Kong, Indonesia, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.
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