Insurance readying for the age of AI
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.
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