Artificial Intelligence Is Changing Insurance

Artificial Intelligence (AI) is changing the world so quickly that it’s becoming rather difficult to keep up. If you’re living in the United States in 2023, chances are you’ve interacted with some form of artificial intelligence before at some point in your life. Whether it was via a chatbot on social media, in a self-driving car, or maybe you even have an Amazon Alexa device in your home. AI is here to stay and will be a more integral part of our lives as technology advances.

How AI Has Affected Insurance In The Beginning

Of course, that does not mean there isn’t room for AI technology to grow. There’s a lot of room. AI is set to change almost every industry out there right now, including insurance. While we are already seeing the effect of AI technology on the analysis side of insurers, the time may come when AI begins taking jobs from the insurance industry. In fact, according to Allstate’s Chief Executive Officer, Tom Wilson, that time is already here.

Mr. Wilson was interviewed by Bloomberg TV from Colorado in 2018 about this topic. 

“[Artificial Intelligence] is going to rip through this economy like a tsunami,” said Wilson. “Whether you’re an accountant, an auto adjuster, a computer programmer, technology will take over,” continued Wilson. “We have to figure out, ‘How do we train them to do the new job, not the job that the computer can do?”

According to Mr. Wilson, that change cut approximately 550 auto adjusters because new technology made their jobs unnecessary. Allstate has made it clear that each employee found a job elsewhere. However, the fact remains that technology is already putting service workers out of jobs, and that trend is continuing today.

That’s why it’s so important, in 2023, for companies to start training their employees for success in the future workforce. AI technology is improving daily, which means an increasing number of workers may be looking for work in the not-too-distant future. This is certainly a space to keep an eye on.

How Is Artificial Intelligence Improving the Insurance Industry?

AI-powered predictive analytics are game changers for insurers. Insurance is predicated on data–from the creditworthiness of prospects to driving styles, accident data, and health history. The more an insurer knows about a client, the more accurately they can tailor policies to an individual’s specific circumstance. AI-powered predictive analytics allows insurers to build data-based models that divide potential customers into different groups. Those groups can help inform the price of policies. The uses for predictive analytics are only just now being discovered. It’s an exciting area to keep an eye on as AI continues to improve and provide innovative insights for insurers.

Customer Service and AI

The customer service space is another area of the insurance industry that is being transformed by AI technology. AI can significantly reduce costs for insurers by allowing them to automate a portion of their customer-facing processes. For example, AI chatbots can be used to engage with potential customers, alleviating the need of having to pay an employee to do that. 

While chatbot technology is still in its infancy, it’s growing by leaps and bounds every day. AI-powered chatbots can use natural language processing algorithms and machine learning to improve their conversations. This process will only become more efficient in the future.

Filing Claims and AI

AI technology has also led to substantial improvements in claims processing efficiency. Anyone who has filed a claim before knows the pain of waiting for that claim to be processed. In fact, claims processing speed is one of the most common critiques levied by customers at their insurers. Using AI-powered algorithms to assess, analyze, and process all kinds of claims, insurance companies can reduce the processing time from approximately 15 days to only two or three!

Insurance Fraud and AI

Experts estimate that insurance fraud costs the insurance industry roughly $40 billion annually in the U.S. alone. AI has the potential to significantly mitigate this cost by analyzing massive amounts of data, including customer history and patterns, that will allow it to quickly and effectively identify potential instances of fraud. Even a small percent improvement will save insurers millions of dollars every year.

How TGS is Staying Ahead of the Game

From smart assistants to self-driving cars, artificial intelligence is changing the world around us. As technology improves, the importance of its impact will continue to grow as well. AI-powered tools are already making a big difference in the insurance industry. It is going to be exciting to watch them continue to improve the lives of insurers and customers alike.

As always, if you want to learn more about your insurance policies or inquire about different coverage, we encourage you to reach out to TGS Insurance. Our team of industry experts can find policies for any risk or situation while keeping your budget in mind! Get your hassle-free quote now!