Artificial intelligence (AI) is revolutionising the insurance industry by unleashing new capabilities and allowing insurers to smooth over historic frictions that have frustrated customers. One of the biggest frustrations insured customers have revolves around the speed of the claims process; once a loss has occurred, they want to submit their claim quickly and smoothly, receiving their payout without unreasonable delay. In the last five years, chatbots have become the torch-bearer for AI technologies in the insurance industry. They are the most visible AI experience for customers, helping to filter out the simplest queries that can be dealt with online without the need for a human customer service agent. But what are the other applications for AI in the insurance industry, particularly when it comes to speeding up the claims journey?

How can AI improve the insurance industry?

As well as customer service chatbots, AI can remove some of the traditional inefficiencies in the insurance claims journey, says Puneet Dikshit, Head of the Insurance Business Unit at WNS, a provider of global business process management. “Claims processes often suffer from considerable inefficiencies due to legacy infrastructure and fragmented processes, further exacerbated by the ongoing consolidation of the industry marketplace,” Dikshit explains. “However, AI has emerged as a solution to address these inefficiencies by providing a unified perspective across the ecosystem, focusing on product centricity while remaining platform-agnostic. This platform-agnostic feature enables the seamless integration of AI platforms with existing systems, facilitating scalability and customisation.” AI can also be used to help insurers spot patterns of suspicious or potentially fraudulent behaviour, freeing up claims handlers to focus on delivering good customer service. “AI can play a significant role in speeding up the claims process in the insurance industry,” asserts Jason Landrum, Global Chief Information Officer at Sedgwick. “By using AI-powered algorithms to analyse data and automate tasks, insurers can reduce the time it takes to process claims from initial filing to settlement. AI can also help detect fraudulent claims and provide insights into patterns of behaviour that can improve risk assessment and pricing. In addition, AI-powered chatbots and virtual assistants can improve customer experience by providing quick and efficient support to claimants. Overall, AI has the potential to streamline the claims process, reduce costs and enhance customer satisfaction – making it an important tool for insurers looking to stay competitive in an increasingly digital world.”

Will AI replace humans in the insurance industry?

As AI has become a mainstream technology, a number of concerns have begun to surface. OpenAI's ChatGPT, launched in November 2022, has been a hot topic of late. But concerns about the privacy and security of data have resulted in a ban in Italy, and other governments are looking cautiously towards the AI sector. The CEO of OpenAI recently told US lawmakers that AI needed to be regulated. Concerns about the future of AI are not limited to privacy and security; there are also fears about the accuracy of information outputted by AI chatbots (ChatGPT itself only claims to be up-to-date to September 2021) as well as the eternal question of whether AI will replace human jobs and cause mass redundancies. Puneet Dikshit believes that AI can work harmoniously with human customer service agents to augment their role. “AI has ushered in a significant transformation in the claims model, shifting it from being led by humans at the forefront to now being driven by AI with humans in the loop,” he says. “For instance, claims teams often struggle to make sense of the overwhelming amount of unstructured data they receive. Moreover, the manual data extraction practices that many companies employ drive significant inefficiencies in cost and time. AI can process unstructured data and rapidly convert it into a structured format, automating claims settlement. “This shift has resulted in a substantial reduction in the reliance on human reviews and assessments, saving valuable time and effort. AI-powered technologies provide real-time intelligence for tasks such as damage assessments, fraud detection, coverage validation, liability determination and total loss evaluation among others. These advancements streamline the claims process lifecycle, reducing time and effort.”

The importance of digital cloud platforms

As well as embracing new technologies, insurance companies have to overhaul the way they do business if they're to remain relevant. This requires substantial cultural change, and a willingness to transform that cascades down right from the top. After all, there is little point embracing AI in one area of your business – like customer service – if you're still dependent on incredibly old-fashioned, manual processes elsewhere. Insurers are beginning to understand the value of cloud-based platforms where customers can make a claim, upload supporting documents and provide information that assists their claim. The entire claims journey, from FNOL onwards, happens in one single ecosystem and removes the convoluted paper trail that previously took place through email or fax. In turn, insurers are able to provide customers with a quicker and more seamless claims experience. “Having a digital platform where customers can upload documents, provide self-service capabilities (like signing up for direct deposit) and interact with their examiner is now table stakes for insurers and TPAs to stay competitive in the industry,” Sedgwick's Jason Landrum says. “Such platforms can streamline the claims process, reduce errors and improve customer experience. “By automating document upload and other features, insurers can reduce manual effort and human error, leading to a faster claims life cycle and help the claimants who are already dealing with a difficult situation feel more connected and cared for. In addition, a digital platform can enhance data security, as sensitive documents are stored securely rather than being circulated physically through the mail. Overall, a digital platform can improve efficiency, reduce costs and improve customer satisfaction, which makes it an essential tool.” Puneet Dikshit continues: “In today’s digital era, where customers prioritise convenience and prompt resolution, the significance of having a digital cloud platform for customers to upload documents effortlessly cannot be overstated. Insurers implementing cloud storage platforms augmented with AI capabilities to contextualise structured or semi-structured and unstructured data can unlock substantial efficiencies quickly.

“The insurance industry is investing significantly in building Straight-Through Processing (STP) solutions, especially for retail products. These solutions rely heavily on integrating AI and cloud technologies to create a low-touch and seamless experience for customers.”