Insurance operations is a collusion of manual tasks – policyholder onboarding, claims management and fraud detection, that can be automated with emerging technologies. This is Claims Automation – a process that requires no or very minimal human interactions.

With AI, insurance companies can offer faster claims management – processing and settlement, ensuring customer satisfaction.

We have seen an increase in interest in AI-powered insurance applications in 2012-2019. Interest in AI insurance has tripled since 2012, according to Google Trends. With the emergence of COVID-19, AI-powered insurance has attracted massive significant interest. 

The use of AI can be used in all provisions of insurance – auto, health, life, property etc.

The COVID-19 pandemic has forced insurance businesses of all sizes to distinguish the nice-to-haves from the need-to-haves. Automation is need-to-have!

However, the trend most relevant for being a competitive, strategic & intelligent insurance company is the widening gap between industry leaders and laggards. The leaders aren’t coming out on top simply because of better cash management or cost reduction efforts. Instead, they’re more adept at “seeing through the fog” of a volatile market and acting quickly when opportunities and threats arise. Read - Claims & Fraud.

If there ever were a time for organizations to embrace competitive intelligence, this is it.

As the saying goes, standing still is the fastest way of moving backwards.

AI in Insurance: Claims Management

Insurance providers can leverage a wide range of AI technologies like document processing, chatbots, and affective computing, to take out or reduce the manual interaction in tasks. It can bring improvements to activities like claims processing, personalized insurance pricing, and fraud detection. The result can save insurers ‘time and cost by as much as 70%’, improved customer experience and efficiently deliver quality ROI for the insurance company.

Why insurance companies are making the shift to AI

• The potential for automation is high: AI technology can offer faster services with fewer errors when compared to the ‘human manual methods. A McKinsey article estimated that
• 25% of the insurance industry will be automated by 2025 
• 50-60% of back-office processes to be automated
• Better personalization in pricing with data availability: 42 billion IoT-connected devices globally is expected to be used by 2025, according to the World Economic Forum. 
• Improvement & efficiency in insurance businesses: Juniper Research shares that car, property, life, and health insurers will increase insurers annual savings by more than 4 times in 2023 compared to 2019 by investing in these emerging technologies. Insurers can see this in terms of efficiency - reduced time and cost in claims processing and settlement, and improving customer loyalty.

Read: Using Technology to Tackle Insurance Fraud in the Booming African Market

Some of the benefits of AI in insurance

Some of the benefits of implementing AI into insurance processes include:

• Time and cost-saving (by almost 70%)
• Improved customer experience
• Improved staff ROI
• Increasing profitability due to more accurate customer pricing and reduction of a fraudulent claims settlement

AI in insurance: The Use Cases

Claims processing

The activities involved in claims processing include multiple tasks - review, investigation, adjustment, remittance, or denial. While performing these tasks, a lot of other issues might occur:

• Inconsistent processing: claims processing carried out by human interaction is prone to errors.
• Different data formats: inconsistent customers’ data sent in different formats to make claims. How do you process effectively? 
• Changing regulation: To improve the industry, there will be continuous regulations or frameworks proposed, reviewed or affected. Insurers need to fall in line with these changing regulations promptly. This is expected to cause constant staff training and process updates that are required for these companies.

Claims document processing

When customers make claims, they’re in an uncomfortable position – FNOL, customer experience and speed are critical in these processes. Thanks to document capture technologies, insurance companies can rapidly handle large volumes of documents required for claims processing tasks, detect fraudulent claims, check if claims fit regulations and claims settlement.

Automated repair cost estimation

A more relatable example is auto insurance. For example, Curacel has introduced an AI system that can recognize accident images and estimate repair costs in real-time. As a result, Africa insurance companies can accelerate auto-claims processing by seventy times (70x).

Claim fraud detection

Insurance fraud is a constant pain to insurers. AI-powered systems can help insurers to detect fraudulent claims based on business rules with data captured from the claimant’s story. This helps to prevent claims payment before the fraud is detected. Feel free to read more about fraud detection in our in-depth guide. (change link)

Appeals processing

After claims are processed, some claims can result in appeals. That is, the claimant’s do not agree with the proposed settlement terms of the insurer. This process can be automated with the combination of AI and automation technologies. Available reports claimed that claims automation can automate 89% of appeals processing with a 99% accuracy rate. Of course, these ratios can be different depending on the complexity of appeals.

Effective and on-time customer response

Conversational AI technologies – think bot, like what Heirs insurance has, can support insurance companies for faster response to customer queries and improves time-to-value. A South African insurance company, Hollard, claim to have achieved 98% automation and reduced cost per transaction by 91%, according to its solution providers, LarcAI and UiPath.

Personalized services

An Accenture study shared; “80% of insurance customers are looking for more personalized experiences”. With AI, insurance companies can better understand their customers and offer customized products at their touchpoints. For instance, policyholders can only pay for the coverage they need, in time and size. Companies like [NAME OF COMPANIES] are already doing it in Africa. This increases the appeal of insurance to a wider range of customers, considering that 9.2% [RATE OF AFRICANS WITHOUT] of people in the USA have no health insurance, some of them may then be able to purchase insurance for the first time. Also, this is expected to drive up micro-insurance.

How the insurance AI ecosystem structured

Insurance focused AI companies: Automation companies aim to integrate AI into their operations and are serving numerous insurers

• InvestSure
• Curacel
• Click2Sure

The above are just a few examples of insurance companies using AI, there are numerous insurtech companies and many of them also use AI/machine learning technologies. Below, you can see them grouped under different insurance products:

Now that you have checked out AI applications in the insurance industry, you can also read our other articles in insurance and some of Curacel’s updates:

• Insurance for the Now: How to reduce waste, fraud and abuse
• Claims Management: Taking a determined stand against insurance fraud
• Using Technology to Tackle Insurance Fraud in the Booming African Market

If you have more questions OR you want to know how AI can help improve your insurance operations, do not hesitate to contact us: [email protected]. We usually respond in 24 hours or less.

Visit our website- curacel.co, to see our range of solutions from Auto, Health and Advance.