There is no substitute for quick service and customer satisfaction. Delivering both assumes greater significance now for health plan companies as the world remains determined to get rid of the pandemic. Giant leaps in the field of artificial intelligence(AI) over the years have given the payer industry a solid platform not just to stay on course to their twin goals, but also to adapt to a technology-driven care delivery system. According to a Google Trends report, the industry’s interest in AI has tripled since 2012.
Across most industries, the convergence of technologies has led to a feedback loop of change in both buyer and seller behavior. According to an IBM report, a host of AI tools and technologies are available now that insurance companies can leverage to offer better services. The insurance industry has for long considered itself immune to the effects of these changes. It has felt protected by strong barriers to outside competition: strict regulation, the scale necessary to create a risk portfolio, the time needed to win the trust of customers, and, last but not the least, customer inertia.
Covid-19 has broken many barriers. Insurance executives now identify changing market forces as the top factors affecting their enterprise; regulation, which has previously been used as an excuse for the industry’s slow pace of change and lack of innovation, was not even among the top three.
Now, chatbots, document processing, or affective computing are changing the rules of how customers and insurance companies interact and deal. The advancement in AI has facilitated personalized insurance pricing, claims and appeals processing, and fraud detection. The number of health insurers roping in AI to achieve reduced costs and improved customer experience is spiraling rapidly.
Key roles of AI in insurance
- Accelerate automation: There is a long list of tasks still being done manually in the industry, which consumes valuable human hours and has a decent room for errors. AI offers quicker and almost error-free solutions. According to an estimation by Mckinsey, by 2025, 25% of the insurance industry will run on automation driven by AI and machine learning.
- Faster data processing, better pricing: The amount of consumer data is piling up through new age devices like fitness trackers, smartphones, cars, home assistants, and social media. The popularity of these devices has resulted in huge data waiting to be processed. Insurance companies can evaluate customer’s risk profiles more accurately using the same data. Smart data processing with the help of AI can increase profitability and expand markets.
- Overall structured and improved business: If Juniper Research findings are any indication, insurers will increase their annual savings by more than 4 times in 2023 compared to 2019 by investing in these emerging technologies. It comes with some extra benefits as well — faster claim settlements and increased chances of customer loyalty.
- Saves both time and cost: Imagine the amount of human hours going into filling forms and noting down other details at the front desk. Without a doubt, the insurance industry has a lot of catching up to do in the area of innovation. The pandemic has proved to be a catalyst in bringing about changes, opening up the chances of hundreds of billions in potential cost savings on the table. It’s estimated that AI can drive cost savings of $390 billion across insurers’ front, middle, and back offices by 2030, according to a report by Autonomous NEXT. The front office is the most lucrative area to target for AI-driven cost savings, with $168 billion up for grabs by 2030. Three main aspects of the front office that stand to benefit most from AI include chatbots and automated questionnaires for an improved and effective overall service, personalized policies, and streamlining of the claims management process. According to the report, the cost savings that insurers can do through AI in the front office will allow them to refocus capital and employees on more lucrative objectives, such as underwriting policies.
- Improved customer experience: Looking for the number of your insurance agent and then dialing it for any query is now the last thing any customer would like to do. Similarly, on the other hand, when an employee does a manual assessment of a claim, it consumes hours. AI can reduce the number of claims that require human analysis and interaction, thus lowering costs and improving the customer experience by speeding up claims resolution. The insurer can increase its base of happy and loyal customers just by pressing into service AI-powered technologies to reduce the claim and settlement process.
- Increase profitability with more accurate customer pricing and reduced fraudulent claims: Know more about the customer and increase profitability. The mantra is being adopted quickly by insurance companies by automating and applying advanced technologies in the data collection processes. Detailed profiles of customers are now being built by the consolidation of data that help to meet their insurance needs, interests, and life stages.