Leveraging AI to manage claims during hurricane season

The North American hurricane season is well underway, which means insurers are hard at work managing customer policies and processing claims. After last year’s record-breaking season, insurance companies must be prepared for the impending tsunami of claims and the corresponding deluge of paperwork. And this year, there’s been no shortage of damage and devastation. Hurricane Ida recently left more than 1 million homes and businesses throughout Louisiana and Mississippi without power for weeks. For insurers, this is a different type of calamity, especially with homeowners and businesses needing to cash in on multiple policies related to tropical storms.

Though it will take months to actually calculate the total losses related to this storm, insured losses are forecast to reach between $18 to $29.5 billion, according to catastrophe modelers. All of which accounts for insured losses across Ida’s entire track for onshore wind and private flood losses as well as adjustments for increased materials and repair costs. And the cost for insurance carriers is exponential as well. Outside of the obvious cost of claim payouts, processing losses has historically equated to an uptick in human resources. This causes more complexity, cost, time and manual effort to review each claim, enter line-by-line and process all other related documents.

Streamlining the process for insurers

There are multiple solutions in the market to help carriers manage the claims process. Unfortunately, the insurance industry hasn’t historically invested in innovation. While many other industries, like banking, have embraced advanced technology to deliver evolving, customer-driven demands, the insurance industry has largely ignored digital transformation efforts. Even today it is still normal in insurance for information to be manually ‘rekeyed’ up to 10 times between different systems. Luckily, the industry knows this is a problem and is trying to address it.

A recent Accenture study found almost 80% of insurance executives realized “AI will revolutionize the way insurers gain information from and interact with their customers.” Of course, the industry’s recent investment in digital transformation and AI isn’t being pushed by process improvements, but rather the acceleration is being driven by the desire to enhance customer experience.

Retail insurers want faster, more personalized experiences and commercial insurers want more intuitive, proactive services. To achieve these results, all insurers need access to the right information at the right time. This requires strategic investments in valuable and sustainable solutions, like AI-powered Intelligent Document Processing (IDP) platforms, which help significantly cut down on the time needed to review, process and understand the information within documents.  

Finding the right tools for the job

Right now, most of your data is unstructured and unusable. It’s just text or tables locked within various unstandardized files. By extracting, analyzing, organizing and interpreting the data buried in digital and paper documents, IDP can transform how we review, process, and ultimately gain valuable insights from documents. Choosing the right platform will help insurance carriers and brokers:

• Monitor and assess liabilities by fully reviewing and digitizing their back-book of policies.
• Improve underwriting performance with access to previously untapped market data and critical information from insurance documents.
• Transition to paperless operations and reduce the time, effort and cost of back-office activities.

With AI-powered IDP platforms, firms can tap into rich sources of data to increase analytical capabilities and revenue-generating potential. Furthermore, these insights will enable and empower insurance agents, brokers and other employees to not only better serve their customers, but also enhance sales cycles, process claims faster and with more accuracy, assess risk more intuitively and more.

Related:

The case for connected insurance

Striking the perfect balance: How insurers need to think about AI

Dr. Lewis Z. Liu is co-founder & CEO of Eigen Technologies. He started his career as a consultant at McKinsey & Company in London, then founded and led the Quantitative Finance & Strategies Division for Aleron Partners LLP, a boutique private equity advisory firm. He is also a former senior advisor to Linklaters LLP, where he co-founded the Tactical Opportunities Group, a deal origination team. Liu holds a doctorate in Atomic & Laser Physics from the University of Oxford.