In­sur­ance ready­ing for the age of AI

Banking Frontiers - - Contents -

There is this Softbank backed in­sur­ance startup Le­mon­ade op­er­at­ing from New York City, which pro­fesses its ca­pa­bil­ity to set­tle a claim in 3 sec­onds. Its pro­cess­ing in­volves a re­view by its bot Jim, cross check­ing de­tails with the orig­i­nal pol­icy and run­ning fraud detection al­go­rithms. Once over, the in­struc­tion is sent across tele­com chan­nels to the bank to pay the claim. All this in 3 sec­onds.

In­sur­ers are now ready­ing for sys­tems pow­ered by im­age recog­ni­tion tech­nolo­gies to as­sess an ac­ci­dent spot and re­motely up­load the pho­to­graphs, which are then pro­cessed in real-time to make near real-time set­tle­ments of the claims. Even drones would be­come part of the sys­tems to pro­vide pic­tures of the losses and to eval­u­ate the scale of a claim. In­tel­li­gent chat­bots are be­ing built to the front of­fice of in­sur­ance com­pa­nies; they are also in­tended to re­place agents. They will work through Face­book or other so­cial me­dia to help cus­tomers com­pare of­fers, un­der­stand the of­ten-con­fus­ing fine print in poli­cies, which the hu­man agents would chose to hide, and help buy a pol­icy. All this with­out or with least hu­man in­ter­ven­tion.

Pre­dic­tive an­a­lyt­ics tools are now be­ing de­vel­oped us­ing claim data and in­sur­ance us­age pat­terns to cre­ate in­sights of an in­di­vid­ual and pre­dict­ing the fu­ture health tra­jec­to­ries and pos­si­ble uti­liza­tion of health­care re­sources. In­sur­ers will also use in the near fu­ture health-mon­i­tor­ing wear­ables as well as driv­ing pat­tern-track­ing de­vices to cre­ate dy­namic un­der­writ­ing al­go­rithms.

It is ex­pected that prac­ti­cally all the as­pects of in­sur­ance busi­ness - un­der­writ­ing, dis­tri­bu­tion, risk pro­fil­ing and mit­i­ga­tion and claim set­tle­ment - will be han­dled by tech­nol­ogy. Ar­ti­fi­cial in­tel­li­gence to be pre­cise. Like­wise, use of bots and con­nected de­vices will fa­cil­i­tate bet­ter and fruit­ful in­ter­ac­tion be­tween an in­surer and the cus­tomer. Con­ver­sa­tions with in­tel­li­gent de­vices will be­come the norm. The day is near when in­sur­ance pre­mi­ums will be de­ter­mined by ma­chines and not ac­tu­ar­ies with their com­pli­cated cal­cu­la­tion method­olo­gies.

This au­gurs well for us in In­dia, for it will counter the prob­lems the in­sur­ance sec­tor faces, like low lev­els of pen­e­tra­tion, lack of aware­ness, etc. Let us wait for the process to hap­pen quickly.

N. Mo­han

Mo­bile : 9322895820

Email : mo­han@bank­ingfron­tiers.com

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