The insurance industry has always dealt in data, but it hasn’t always been able to put that data to optimal use. Until now.
With the rise of artificial intelligence, which analyzes and learns from massive sets of digital information culled from public and private sources, insurers are embracing the technology’s many facets — from machine learning and natural language processing to robotic process automation and audio/video analysis — to provide better products.
Customers, too, are benefitting from practices like comparative shopping, quick claims processing, around-the-clock service and improved decision management.
How AI Insurance Works
Below are some of the ways AI has reshaped the insurance industry, leading to benefits (and some challenges) for insurers and customers.
AI Streamlines Insurance Processes
AI helps insurers find evidence of potentially fraudulent claims and speeds up the underwriting process, during which insurance companies evaluate potential customers to determine their risk. AI can do these tasks faster — and more cost-effectively — than human employees by training models with historical data and using the models to automatically process new customers and claims.
AI Reduces Biases
Rates for car insurance are traditionally determined by a buyer’s personal factors, such as credit score, income, education level, occupation, and marital and homeowner status. But these factors penalize low-income buyers and aren’t directly related to a driver’s likelihood of getting into collisions. Companies using AI to build models can reduce these biases by actively excluding these factors during the training process.
AI Offers Flexible Insurance Options
Insurers can track the habits of drivers for organizations like Uber and Lyft with wearable technology. If drivers for a service demonstrate safer driving habits, insurers can then offer that service lower premiums. Devices can also be used to activate insurance coverage only when drivers are actually driving, cutting costs while insuring service workers who would otherwise have had to purchase their own policies.
AI Promotes Safer Driving Habits
As an example, if a delivery company that insures its drivers is experiencing a spike in accidents or traffic mishaps, AI and machine learning systems can crunch the data collected by connected devices to recognize patterns that would explain the reason for the accidents. Based on that analysis, the insurer can make recommendations to the company that would help reduce the number of accidents and expensive claims.
AI Still Lacks Transparency
When AI-based risk models are built, it can be harder to pin down what insurance companies are basing higher premiums on. For instance, if companies use neural nets — an AI technique that’s the basis for deep learning — the resulting model is opaque. Insurance companies would know what factors were used to train their AI model, but companies wouldn’t know how the model internally related those factors to risk and which inputs are more important.
AI Can Be Influenced by Proxy Factors
Even if companies don’t provide data about factors like gender, race and income, AI could still find other factors that stand in for that data and have effectively the same outcome. If something like the time of day when driving is taken into account to build a car insurance model, that could be a proxy for income level.
“If people who drive at a certain time of night are more likely to have claims, an insurer might say we should charge them more,” said Daniel Schwarcz, professor of insurance law and regulation at the University of Minnesota. “But it may be that the reason there’s a correlation is not because driving at that time is riskier, but because people with lower income drive at the time of night, and people with lower income are more likely to make claims.”
AI Insurance Examples to Know
While there are pro and cons to the technology, insurers and customers have widely reaped the rewards of AI-based algorithms, making processes simpler and safer. To get a better sense of how AI impacts the insurance industry, check out these 26 AI insurance applications.
AI Insurance Applications
- Claims processing
- Personalized insurance policies
- Underwriting services
- Customer service
- Efficient insurance operations
- Insurance for service drivers
- Assessing vehicle damage
- Determining property risks
- Selecting health benefits plans
- Encouraging safer driving habits
Automating Invoice Processing
Trupanion is a pet insurance provider. The company’s web-based vet portal uses artificial intelligence trained “to replicate real-world policy decisions” to automate invoice processing. The proprietary AI technology is designed to help to get hospital bills paid quickly, efficiently and accurately so that pet parents don’t have to worry about making upfront payments for veterinary care or dealing with tons of paperwork.
Estimating Vehicle Damage
Liberty Mutual explores AI through its initiative Solaria Labs, which experiments in areas like computer vision and natural language processing. Auto Damage Estimator is one result of these efforts. By conducting comparative analyses of anonymous claims photos, this AI tool is able to quickly assess vehicle damage and provide repair estimates post-accident.
Automating the Claims Process
CCC Intelligent Solutions digitizes and automates the entire claims process with artificial intelligence. Photos submitted from accident sites undergo analyses by AI technology and insurer-approved rules. Based on this data, CCC’s AI is able to assess damages and provide timely estimates for insurers to approve and send to their customers for confirmation.
Making Submitting Claims Easier
Clearcover uses artificial intelligence to insure users and quickly process claims. After filling out a basic questionnaire, Clearcover users can receive AI-generated quotes and choose the one that best fits their needs. And if users are ever involved in an accident, they need only to snap a few pictures and fill out a short form before ClearAI jumpstarts the claims process.
Streamlining Insurance Processes With AI and Machine Learning
Gradient AI aims to enhance every aspect of the insurance business with AI tools and machine learning models. For instance, the company’s AI can more accurately assess risks for underwriters, single out expensive claims that need attention and even provide automation services when needed. As a result, Gradient AI’s technology has streamlined insurance areas like business owners, commercial auto and group health.
Customizing Health Benefits
Nayya guides individuals and companies through health benefits with a selection process that runs on AI technology. Customers begin by completing a 10-minute survey that considers factors such as a person’s age, health history and what types of benefits they prefer. After filling out this information, Nayya’s platform then matches each individual or group with a benefits plan that best aligns with their circumstances.
Training Customer Service Reps in Real Time
Hi Marley uses an all-around cloud platform to make communication between customers and insurance providers more efficient. The Hi Marley Insurance Cloud comes equipped with AI features to ensure customer service reps operate as fast as possible. For example, Hi Marley’s platform translates text into different languages and delivers real-time coaching to improve interactions between reps and customers.
Detecting False Claims
Snapsheet digitizes the claims process with its AI tools and cloud-based claims management software. Snapsheet Cloud is an insurance platform that automates various parts of the claims process, reducing the time it takes to calculate appraisals and receive online payments. The company’s AI features also snuff out false claims, allowing insurance teams to operate with a higher degree of efficiency.
Matching Customers With Car and Home Insurance Policies
Taking advantage of artificial intelligence, Insurify quickly matches customers with car and home insurance companies that fit their specific needs. The company relies on RateRank algorithms to determine policies that may be a good fit for each customer, depending on factors such as a person’s location and desired discount amount.
Keeping Underwriting Policies Competitive
Bold Penguin allows insurance companies to quickly write policies that stand out in the industry with two AI-powered tools, SubmissionLink and ClauseLink. When carriers receive documents from agencies, SubmissionLink analyzes these materials and locates essential data points for underwriters. Meanwhile, ClauseLink reviews insurance clauses to help providers compare their policies to those of competitors.
Creating Policies With an AI Assistant
Lemonade provides paperless — and personless — renters and homeowners insurance. Using chatbots and its AI assistant Maya, the company creates policies and handles user claims for both desktop and mobile. Plus, customers can choose which nonprofit organizations receive underwriting profits as part of the company’s annual “Giveback” initiative.
Improving Property Analysis
CAPE Analytics combines data science and computer vision to provide in-depth assessments of over 100 million properties. CAPE AIRE’s property analysis factors in a range of variables, such as how far structures are from bodies of water and highways. As a result, firms can make more informed decisions when underwriting insurance policies for, trading and investing in properties.
Supporting Virtual Property Analyses
Yembo instills confidence into the underwriting and claims processes by using AI technology to conduct virtual surveys. After customers take pictures and short videos with their smartphones, Yembo’s AI blends deep learning and computer vision techniques to assess visuals and locate any potential risks. This way, insurance providers gain a better understanding of each property and determine what they can cover.
Determining Risk With Machine Learning
ZestFinance’s automated machine learning tools let lenders more effectively gauge risk and reach potential new customers by harnessing a wealth of traditional and non-traditional data, such as custom credit score models, to achieve better predictions. The ultimate goal is to help companies boost underwriting profits while diminishing risk.
Informing Property Assessments
Flyreel is an AI underwriting solution for property insurance. With a conversational AI assistant, a proprietary computer vision system and detailed property reports, Flyreel’s platform speeds up the underwriting process. It also gives underwriters a holistic view into property, claims and risk management data that helps them deliver more accurate assessments.
Selecting Policies for Professional Drivers
INSHUR is a mobile-first way to purchase car insurance for TLC insurance (limo, taxi, rideshare drivers, etc.). Powered by AI, the INSHUR app lets professional drivers search a variety of quotes and purchase a policy that best fits their needs. Additionally, users can transfer existing policies, report claims and get real-time alerts.
Pairing Customers With Best-Fitting Customer Service Reps
Afiniti improves the quality of customer conversations by matching callers with customer service reps based on best fit, rather than call order. With access to extensive data, the company’s AI technology determines patterns of human behavior and connects reps with callers based on these trends. Insurance companies then have the opportunity to form stronger bonds with customers through personalized pairings.
Serving Customers With an AI Assistant
Insurmi enables insurance companies to deliver efficient and personalized customer service with an AI assistant named Violet. Natural language processing, machine learning and UI concepts allow Violet to adapt to conversations and handle customer service tasks for companies. In addition, Insurmi team members take care of the coding and deployment of this AI technology and provide 24/7 ongoing technical support to clients.
Reducing Distracted Driving
One of driverless car company Nauto’s goals is to help commercial fleets avoid collisions by reducing distracted driving. The company’s AI-powered driver safety system — which boasts dual-facing cameras, computer vision and proprietary algorithms — assesses how drivers interact with vehicles and the road to pinpoint and prevent risky behavior in real time.
Empowering Teams to Build and Monitor Applications
H2O.ai helps insurance companies adopt AI with its automated machine learning platform. This tool makes it easier for teams to build applications and monitor services. As a result, insurance providers have relied on H2O.ai’s technology to assist with fraud detection, marketing, customer service, risk management and other areas.
Addressing Customer Inquiries
Allstate supports small business owners with ABIE (“Abbie”), an AI-powered tool that helps customers get answers to questions and locate critical documents via an onscreen avatar that can have naturalistic conversations with insurance agents. Through the use of contextual knowledge and intelligent content, ABIE is able to address what coverages work best for certain businesses, what incidents each coverage covers and more.
Enhancing Risk Assessments
Lapetus Solutions works with industries like life insurance and medical underwriting to improve the overall assessment process. By combining extensive data with sensory analytics and adaptive assessments, Lapetus Solutions empowers insurance companies to provide more accurate policies that are tailored to the unique needs of each individual.
Processing Insurance Paperwork
WorkFusion takes piles of paperwork off the desks of insurance companies with its intelligent document processing technology. Blending AI and machine learning techniques, WorkFusion’s tools can learn how to analyze emails, PDFs, Excel files and other documents. The company also offers an AI digital worker, Ilana, to businesses that could use an insurance professional who specializes in underwriting services.
Personalizing Life Insurance Plans
Sproutt Insurance matches individuals with relevant life insurance plans using an AI-powered, 15-minute assessment, rather than having them take lengthy exams. Each customer takes Sproutt’s Quality of Life Index, which factors in variables such as lifestyle, emotional health and nutrition. With access to the latest medical research, Sproutt can then make recommendations on life insurance products that fit an individual’s unique situation.
Tailoring AI Applications to Business Needs
Insurance companies can choose how they embrace AI solutions with CognitiveScale’s Cortex AI Platform. It facilitates the creation of AI applications, so clients can easily build models and apps that fit their specific business needs. Within the insurance industry, leaders are turning to CognitiveScale to guide conversations with chatbots, develop promising leads and detect fraudulent claims.
Engaging Customers Through Various Languages
Avaamo is a conversational AI platform that streamlines processes for insurance providers. With AI and machine learning capabilities, the company’s platform can converse with customers in over 100 languages. Insurance providers with wide customer bases can then depend on Avaamo to reduce the time it takes to produce quotes, file claims and underwrite policies.