It’s estimated that approximately 77% of all insurance companies have deployed or are in the process of deploying machine learning-powered artificial intelligence technology. This is well ahead of the 50% of large companies — across all industries — that are currently leveraging AI and machine learning tech. But how are insurance companies using AI and related technologies such as ML? And is there a difference in terms of how health insurance firms versus auto insurance companies are using AI?
Using Machine Learning and AI for Insurance Fraud Detection
Insurance fraud is a very real — and costly — concern for insurance companies in a variety of different niches, from fraudulent health and life insurance claims, to insurance policies covering homes, commercial properties, automobiles and beyond. Incidences of insurance fraud result in elevated premiums across the board, placing much-needed insurance coverage beyond the financial reach of some individuals. Fortunately, machine learning algorithms and AI can be used to detect behaviors that may be associated with an incidence of fraud.
It’s even possible to use ML and AI to monitor social networking channels to identify possible fraud “rings” whereby you have multiple individuals collaborating in an effort to commit insurance fraud or other crimes.
The net effect: insurance companies are positioned to offer insurance coverage at more affordable rates. This can quite literally be life-saving in the case of health insurance and life-changing in the case of life insurance since many forms of life insurance double as an investment of sorts.
Setting Insurance Premiums Using ML and AI to Assess Risk Level
Insurance premiums are directly linked to the perceived level of risk. The greater the risk level, the more you can expect to pay by way of insurance premiums. In fact, some insurers may refuse to provide coverage altogether if the risk level is perceived to be too great.
Machine learning algorithms can be paired with AI to evaluate risk levels more accurately, allowing for a more fair insurance premium — one that reflects a prospective customer’s actual level of risk. This technology can be used to analyze large volumes of data, identifying trends, patterns and correlations that may otherwise be elusive during the traditional underwriting process.
Similarly, AI can be used to create a digital customer profile, which then serves as the basis for the selection of insurance coverage options. This helps to prevent a scenario whereby a customer is over-insured or under-insured.
Using AI Chatbots for Customer Service
Today’s AI chatbots are fairly sophisticated, allowing insurance companies to provide customer service to current and prospective policy-holders. An AI-powered chatbot can handle a wide variety of issues, reducing the burden on human customer service professionals who are subsequently freed to deal with more complex issues. This results in a better customer experience across the board and with machine learning technology in play, you can create an insurance chatbot that self-improves and “learns” over time.
AI-Powered Claims Processing
Artificial intelligence can be used for processing insurance claims, as AI can verify claims and policy data, amongst other things. Before the arrival of this technology, claims processing was a time-consuming task that left policyholders waiting for weeks or even months for a reimbursement check.
What’s more, AI can serve more than one function. While processing claims, artificial intelligence can evaluate the data for signs of insurance fraud. So in addition to processing a claim, AI can simultaneously perform a risk reduction function by flagging suspicious claims that ought to be subject to a more intensive review.
AI speeds claims processing dramatically, cutting the processing time to mere hours or even minutes and leading to faster payouts, lower administrative costs and a greater level of satisfaction amongst policy-holders.
Visual AI / Computer Vision for Damage Evaluation
Damage evaluation is a key — albeit time-consuming — aspect of insurance claims processing. Enter: computer vision AI, which can be used to evaluate still images and videos of vehicles, real estate and other insured property.
Traditionally, damage evaluations were the exclusive domain of humans. But today, with the help of machine learning-powered visual AI, insurance companies can expedite the claims process, leading to faster payouts and a greater sense of satisfaction amongst policyholders. The impact can be especially meaningful for life insurance payouts, as surviving family members commonly incur costs in the days and weeks following their loved one’s passing.
Predictive Analytics in the Insurance Industry
The insurance industry is tasked with predicting the future to some degree as they attempt to evaluate risk level and predict policyholder behavior and claim probabilities. Fortunately, predictive analytics, machine learning and AI technologies are up to the task of forecasting the future using large volumes of historical and behavioral pattern data.
Predictive analytics can also be used for risk reduction, predicting which claims are apt to be valid and which claims are more likely to be fraudulent. This accelerates claim processing times, while simultaneously slashing the losses that result from insurance fraud. These savings are passed on to the consumer in the form of lower insurance premiums.
Developing AI for a Highly-Regulated Industry
As you consider hiring an AI developer for your insurance company, it’s important to consider the many regulatory issues at play. The rules and regulations that impact your business and its operations will also have an impact on your AI and machine learning development project.
For example, insurance companies must consider HIPAA regulations, which impact the manner in which patient data is collected, transmitted, accessed, protected and stored. This regulation impacts how machine learning and AI software is architected, so it is prudent to hire a development company with extensive experience working with highly-regulated businesses in the insurance space and beyond.
Hiring a Top Dallas AI Development Company
7T specializes in predictive analytics, machine learning and artificial intelligence development for clients in the insurance industry, amongst others. We take a problem-solving approach to development, beginning with a comprehensive Ai and ML consultation, which includes an analysis of a client’s challenges and pain points. Then, we work to arrive at a development plan that serves to resolve those pain points, while simultaneously promoting productivity, profitability and compliance with all relevant rules and regulations.
The potential for machine learning-driven artificial intelligence is exciting and 7T offers artificial intelligence development solutions to clients in all industries and business spaces. Our problem → solution approach has the potential to bring exceptional results, while also generating new, profitable opportunities for your organization.
7T is based in Dallas, with additional locations in Houston, and Charlotte, NC. But our clientele spans the globe. If you’re ready to learn more about AI and machine learning development, contact 7T today.
