Financial technology (aka fintech – or, in this case, insurtech) is really starting to disrupt an industry that has not evolved for some time now.
AI is going to be increasingly important in the financial services industries. Insurance companies such as Progressive are offering discounts if you agree to putting a little monitoring system in your car that lets them know whether or not you’re a safe driver.
AI is like a car, in some ways. The more data it has, the smoother it runs. Using AI and machine learning in the insurance industry will record all insurance claims, decision processes and data. Over time, AI can learn to approve or reject claims all by itself.
In addition, chatbots and robo-advisers will become commonplace, as well as receiving information in real-time. For example, if you’re on a skiing holiday in the Swiss Alps and are on a ski slope, geo-location data will trigger alert and will message you asking if you would like extra cover.
Using AI to analyse massive data sets will help contribute to the advancements of insurance customer care without the need of using a human employee.
Building a deep understanding of client needs would allow AI to make the most relevant offers and increase the chances of making a sale. Also, insurance loyalty schemes would determine the best complementary product to offer from the available client data.
What’s even more interesting, using AI would be able to predict environmental catastrophes. It can help insurance companies in high-risk locations to adjust their policies as well as potentially run from significant expenses in unforeseen circumstances.
From using massive data sets, AI has the potential to prevent expenses on fraudulent claims based on historical data. With a wealth of data available, artificially intelligent machines could be able to determine the possibility that some insurance cases are staged to receive a claim. This is conducted by comparing a large scale of claims in an available dataset. An algorithm then determines whether a claim is legit or if it turns out to be fraudulent.
This is just one example of one industry that will utilise this form of technology in the very near future, and – indeed – is already beginning to do so. The key for the insurance industry is having access to a lot of data. The more they can automate, and the more they can rely on AI, the more the industry will change for the better.