AI – the 411

AI (Artificial Intelligence) may be the buzz word of 2019, but what does it really mean and how can it positively influence the Insurance Industry?

  • AI is simply intelligence demonstrated by a machine in contrast to natural intelligence displayed by humans
  • AI is setup by training machines to perform human tasks, which requires data i.e claims history’s
  • It mimics problem solving and decision making done by humans
  • Highly detailed risk assessment is a key success factor for insurance companies – potential claims tomorrow directly influence financial planning and resources today. Yet what seems like a simple task is a challenge in everyday practical work.
  • Insurance policies are now being sold by chat bots which are computer programs that conduct a conversation via phone, text or on a website
  • Insurers can also increase uptake of policies by being able to customise policy cover more closely to an individual’s lifestyle needs so that they are not paying for unneeded extras
  • AI allows more time to focus on important tasks I.e health insurers can instantly know all the previous claims, the history of the solicitor, the claimant’s condition and whether life-changing injuries have occurred 
  • Despite fear mongering in the media with reports of robots replacing humans, human expertise is still needed because although AI can detect a problem, humans are needed to discover why
  • For example, in insurance fraud detection whereby fraud handlers need to know why a case is suspicious in order to do their actions, it’s not enough to alert a suspicious claim, they need to know why it is suspicious
  • It’s understandable to be hesitant if AI had the final say in determining if you received your life insurance payout and thus why humans still have the overriding say in the matter

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