How AI is Transforming Insurtech

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: 

1. 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. 

2. 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. 

3. 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. 

4. 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!