The insurance industry has seen rapid development during the past decade, thanks to the incorporation of advanced technologies. When the current pandemic first hit the industry, not only did it transform the way it works, it had to cater to people affected by the pandemic in different ways. And this is when Insurtech companies came to the forefront as they had Artificial Intelligence (AI) backing them. AI in the insurance industry can not only serve clients better, but also enhance the revenue of insurance providers.

So, what is AI? It is the process of making machines more intelligent and getting them to act like humans, so that they can learn and solve problems. Smart machines can process large amounts of data and automate labor-intensive processes to complete them quickly and more efficiently. Being a data-driven industry, AI has a lot to offer in terms of reducing fraudulent cases, processing insurance claims, improving customer experience, and more.

For an industry that provides varied solutions as per the customer's needs and requirements, most insurance processes are still paper-based and require a significant amount of human intervention. This requires a lot of time and is error prone too, as most manual processes tend to be. The good news is that AI is transforming these slow processes and making them streamlined to provide the best customer experience possible. Insurance companies are starting to invest heavily in AI-based solutions, and they are right to do so, as AI is becoming a valuable asset for doing business quickly, efficiently, and more securely.

Here are the multiple benefits of AI:

• Creates Personalized Insurance Policies

Every customer has a different requirement when it comes to insurance. Some might require medical insurance for their family, while others might need it for their employees. With the help of AI, behavioral policy pricing has become a reality and insurers can use analytical data to create a relevant policy for their target customer. The customer will only need to pay for the policies they find relevant, giving the insurance company a competitive edge.

• Reduces Fraudulent Activities

Insurance fraud is quite common and is costing the industry billions of dollars annually. This compels many people to pay hundreds of dollars in extra premiums per year, which turns them against insurance. However, big data analytics and machine learning can identify insurance fraud and other activities and alert the insurance companies so that they can prevent it from happening in the first place.

• Provides a Great Customer Experience

Understanding all the technicalities in an insurance policy is beyond the reach of most common customers. Complicated terms and jargons tend to demotivate customers as they want simple information which is easy to understand. Luckily though, AI-powered chatbots help answer customer queries about anything at any time, which gives customers the peace of mind they need. For complex issues, the chatbot can connect the customer directly to a representative who can provide dedicated support.

To wrap up, AI in the insurance industry is causing major disruption and is attracting customers with improved data analysis, tailor-made insurance policies, affordable solutions, and seamless claims processes. While the implementation of AI is still in a nascent stage, it’s gaining popularity steadily. More and more insurance companies are realizing the cost-saving, time-saving, and revenue-generating benefits of AI, and are incorporating it into their mainstream.