Over the past few years, Artificial Intelligence (AI) as a technology has matured and come into its own.
With each passing day, experts across industries identify yet another AI application that has the potential to change millions of human lives. California-based University of Southern Californias Viterbi School of Engineering and its School of Social Work recently announced that they had joined forces to launch the Center on Artificial Intelligence for Social Solutions. Also in California, University of California Berkeley unveiled its Center for Human-Compatible Artificial Intelligence. Googles DeepMind is learning how to better apply radiotherapy to cancer patients to reduce the impact of dangerous doses of radiation on areas surrounding a tumor.
Not only the way we live, but even the way we work and play is set to change. Kawasaki is developing artificial intelligence for motorcycles that will allow future bikes to chat with their riders, and even allow riders control the cycles using their voices.
We appear to be on the verge of an AI Spring as AI solutions offer the potential to innovatively solve complex and ambiguous problems with the aid of self-organizing processes and reinforcement learning reducing the need for human direction and intervention. And we see more and more insurers gearing up for this technology storm. As a first step, AI definitely has helped insurers automate many core insurance tasks such as underwriting, claims handling, and straight-through processing.
While these benefits are significant, given the many years of hype about AIs potential you might be wondering: Is that all there is? At long last, AI is set to empower insurers seeking to get closer to customers and differentiate their offerings. Insurers are leveraging AI not only for enterprise process automation, but also to provide richer customer experience, reduce costs, and deliver value-added services.
The power of AI has multiplied with different capabilities, such as voice recognition, natural language processing (NLP), sentience, ability to deal with complexity, deep learning, pattern recognition, computer vision, predictive and prescriptive insights and emoting. And here is how these technologies, combined, are set to change traditional operating models in insurance in areas such as:
Products Structuring: AI will play a vital role in launching innovative insurance products that are structured to change dynamically and contextually for individual customers.
Actuarial and Product Pricing: AI can help build new, dynamic risk models. Depending on the data shared by the interconnected ecosystem, risk will be priced, monitored regularly, and revised at a personalized level.
Sales and Grievance Management: Contact centers will use voice analytics to parse human speech, and capture the mood and sentiment of customers, ensuring personalized and contextualized responses that enhance customer experience.
Intelligent Systems for Underwriting: Intelligent systems with deep learning capabilities for underwriting functions will enable smart classification and pricing of risks.
Policy Servicing and Customer Interaction: The use of NLP and contextual intelligence will drive the future of insurer-policyholder interactions. AI systems will automate some customer relationship management processes, such as lead qualification, and initiate dialogue without the need for a human intermediary.
This already is reality. Canadian insurer, Optima Global Health, has teamed up with Ellipse Synergy to develop a fully digitized system, which will make life insurance forms more dynamic and intuitive, facilitating the ability of employers to assess employee health and wellness and intervene if employees need aid.
Its not too early to start thinking about a sentient AI that intuitively imagines or reimagines the future of insurance. In the near term you should pursue AI in a phased manner. Start with exploring one aspect of AI in a specific business operation and traverse deep into it to create a niche offering.
To know more, read our white paper, Artificial Intelligence Reimagines Insurance: Architecting Breakthrough Transformation, which explores impact and applications of AI in insurance.