AI will play a key role for insurers in 2023
Artificial intelligence will help insurers effectively manage costs, improve customer service and identify insurance fraud.
Increasingly sophisticated schemes, inflation and a looming recession made 2022 a tough year for insurers — and we anticipate these challenges will only continue to shape the industry this year. However, future-focused insurers leveraging artificial intelligence (AI) solutions are adapting well in today’s changing environment.
With impactful options for fraud detection and claims automation to underwriting, AI is helping leading insurers maintain their share of customers and ensure profitability in this difficult business environment.
AI technology will be the driving force behind insurers’ success in 2023 — securing their continued survival amidst ongoing industry pressure.
State of the insurance industry in 2023
The industry will face increasing challenges as we enter a recession. We know fraud rises during times of uncertainty. Individuals pressured by the tough economic climate may attempt to game the system to boost their income — and organized fraudsters will similarly see the recession as an opportunity to cash in on a variety of schemes.
This challenge is only further complicated by the level of sophistication in today’s fraud strategies. With deep fake and AI-generated images, it is becoming extremely challenging to distinguish between real and forged documents with the human eye alone.
Ultimately, special investigation teams are stretched thin and don’t have the resources available to manually review every claim. In fact, low-value and low-complexity claims are often written off by insurers. The conditions of today’s industry are only resulting in more fraud, leaving already overburdened insurers struggling to keep up. This is where AI technology becomes a must-have.
The importance of AI automation
We’re in a moment of time where AI is the leading solution for the growing workload. Insurers are facing more work than ever before — and tackling these challenges with more people is no longer feasible due to the costs required to source and hire new staff. Intelligent automation is key.
AI is helping insurers handle the increased demand by eliminating the rote and manual work from their plates. With recommendations for autonomous claim payments and fraud avoidance, AI handles the high-volume low-value claims that are the frequent bottlenecks in claims processing. In turn, insurers are empowered to focus on only the highest value and most complex claims and strategic tasks — such as customer success.
With consumers steadily expecting more from their providers, delivering consistently excellent customer service is fundamental. Consumers are more price-conscious than ever and offering competitive pricing is critical to winning customer loyalty during a recession.
Leveraging AI at the underwriting stage will help insurers properly identify risk and appropriately price premiums — improving loss ratios and enabling more competitive pricing. AI involvement in claims processing also means meeting customer needs with faster claim payments.
Although insurers may feel apprehensive about turning responsibilities over to technology, explainable AI offers transparency in all aspects of decision-making — making the technology that much easier to accept. With options for tiered human review at each stage, insurers can also feel confident that the system is operating as expected.
It goes without saying that being an insurer in today’s environment is tough. With industry conditions generating increased pressure, insurers have been placed in an increasingly daunting position. However, those leveraging automation are adapting well to the shifting environment.
Gary Saarenvirta is the founder and CEO of Daisy Intelligence and an expert on autonomous AI. Under Gary’s leadership, the company is delivering Explainable Decisions-as-a-Service for risk management. By actioning the Halo Effect, Gary discovered an opportunity to drastically improve business decision-making with automatable recommendations for insurers.
Opinions expressed are the author’s own.
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It’s a wrap: Key issues insurers faced in 2022