Artificial intelligence stands for the machine’s ability to think and study as humans. The impact of artificial intelligence on society is obvious. AI-based technology has already become common for many industries bringing lots of advantages which can help enhance the annual economic growth in many countries. However, this innovation also brings new challenges to the world.
It is expected that robotics will increase productivity through unique data obtained from analysis, and simple tasks automation. More and more AI-based technologies like chatbots or autonomous robotic cars, for example, transform industries and society providing such benefits as an increase in efficiency, new products, and a decrease in the number of repetitive tasks.
Still, artificial intelligence brings not only benefits but also some drawbacks for economics, healthcare, politics, mobility, and other sectors. The labor market will face some challenges caused by the use of AI technology as it changes the roles of labor resources.
Insurance can help avoid and manage emerging risks and challenges. Liability insurance, medical insurance, and life insurance will have to be adjusted in order to equally protect both consumers and companies. Insurance should better help companies eliminate the risks such as cyber attacks, business interruption, product recall and reputational damage caused by a negative incident.
Artificial Intelligence becomes a concern for personal data, especially regarding the extent to which it can be used to develop the intelligence of agents. European personal data protection laws contain noticeable restrictions on the implementation of systems based on artificial intelligence. Companies will need to reduce, protect or financially protect themselves from risks. At the same time, difficulties with the liability definition and its insurance coverage are expected. Most likely, new models will be adopted.
Liability insurance in areas such as the use of autonomous cars will increase the pressure on manufacturers and vendors of software and reduce direct consumer responsibility. At the same time, artificial intelligence will bring insurers not only new risks but also benefits. Artificial intelligence technology will improve the process of carrying out insurance operations, and many benefits are already evident. It will be better to identify customer needs. It will be easier and faster to handle with policymaking and claims management. The quality of forecasting large corporate risks, such as interruptions in production, threats to cybersecurity and macroeconomic crises, will increase.
Chatbots will be able to help customers around the clock. Finally, the results of data analytics with the help of artificial intelligence will help push the boundaries of the insured, complement existing products and give rise to new solutions to transfer the risks in areas such as a break in production without physical damage and reputational damage.
How Will Artificial Intelligence Influence the Insurance Industry?
Artificial intelligence will also affect what value insurance brings for clients. In other words, today’s technology is based on AI to improve value chain in insurance, making it more effective in targeting clients and in the provision of services on time and at a lower price. Most common technologies related directly to the value formation in insurance are described below. Such technologies increase the productivity of insurance by providing customers with greater value at a lower price and in less time.
Unlike other industries, the insurance sector is characterized by relatively low frequency customer interactions (usually customers contact the insurer only when they purchase products or report loss). Therefore, the ability to use client data for understanding customer preferences is extremely important.
Artificial intelligence could be useful to sort and analyze customer data and provide accurate customer profiles when developing marketing campaigns. In addition, artificial intelligence helps process enormous volumes of market data, including economic demand, competitor offers and market volatility to set tariffs for products according to current and forecasted demand.
In the future, artificial intelligence will provide support to underwriters. There are many areas such as reputational risks, cyber risks, supply chain, economic, and climate risks in which machine learning can help companies better understand their risks. Artificial intelligence can also be used with other new technologies, such as blockchain to provide new, faster and more customer-oriented services. For example, sensors on shipping containers now provide data on the location and condition of the cargo, which after analysis, can activate insurance coverage or reduction measures damage if goods are damaged.
AI-based technologies also help recommend new products to potential customers. In particular, when individual customer profiles and goals are matched with available products automatically, the process of advising on products runs faster and more efficiently. Considering that insurance products are complex, artificial intelligence can provide customized illustrations and help customers identify their insurance needs, especially when
we are talking about products from several components, such as funded life insurance.
At the time of purchase and before transferring to underwriting, the insurance policy must be processed and analyzed. Such a process can take several hours and even days if done
manually. Artificial intelligence allows you to automate the processing of orders, taking on
various types of data and fact-checking, such as fraud detection and credit analysis. As a result, the client gets the best experience of interacting with the company by speeding up purchase process.
During the period of the insurance policy, chatbots can provide support to customers around the clock. Moreover, policy adjustments, such as portfolio diversification and risk profiling, can be performed automatically using artificially based algorithms.
Given the large volume and relevance of data on economic, demographic, natural and market conditions, there is a great potential for more accurate risk determination. Artificial intelligence provides support in interpreting risk data to effectively manage risks.
As you can see, artificial intelligence will greatly influence the insurance niche by automating a lot of processes, therefore distributing responsibilities of people working in this sector. Obviously, AI will ease the work of insurance agents and companies and enhance the customer satisfaction level with the services provided. If you belong to the insurance industry, think of developing an AI-based app for your business at top outsourcing countries of the world.