Recently an insurance company in the US settled an insurance claim within 3 seconds. A leading insurer in India - ICICI Lombard is on the verge of offering auto insurance policies based on photos clicked by the customer!...
Digital technologies like artificial intelligence are disrupting the way insurance is purchased, claims are filed, processed and settled by insurers. The disruption is expected to bring tremendous advantages for you, the customer, as well as the insurance companies. Read on to know how.
Touchless claim processing- the promised land
At present, claim-settlement is a lengthy process, and claims are touched or handled by multiple agencies before the claim amount is approved and disbursed. The situation has remained the same over the years. Hence, In India, where there are 230 million vehicles and 1,200 accidents on a day to day basis, inspection and claim processing can be a tedious and time-consuming affair. Thus, you and your cars often have to remain off-road for days following a mishap.
However, with the dawn of AI, all the manual intervention can be done away with. Artificial Intelligence, machine learning, telematics, Big Data and a host of other technologies help capture damage, perform audits, report claims and communicate with the customer. Thus, with AI, the claim processing time is expected to come down from days to a matter of minutes.
Benefits that Touchless technology will bring about
Touchless claim processing would offer a range of benefits. Once implemented, it would help you file for claims without having to face the red tape. For the insurers, it would result in measurable improvements in engagements. A recent survey reveals that the top 50 adapters of AI have experienced customer engagements to the tune of 70%. The insurance companies would reap benefits across several vital metrics as illustrated below-
As evident from above, improvement in performance across these critical matrices would not only benefit the insurer but also bring immense benefits for the customers as well. In addition to a reduction in the processing time of approvals, AI would also help in better underwriting, thereby reducing the costs of premiums.
Another benefit that the introduction of AI brings is a visible reduction in losses due to fraud. According to an estimate, fraudulent claims currently account for annual losses to the tune of Rs. 10,000 crore for the insurance industry. As AI helps in better detection of fraud, it will benefit in faster disbursal of insurance claims.
For instance, a family, covered under the term life insurance, have to wait for several days now before the insurance company can start the process of claim disbursal. During this time, the insurance company accesses whether the claim is fraudulent or not. Now with AI coming in, millions of database searches can be performed within fraction of a second and claim disbursal will become a breeze.
The big picture
Over the last decade, the insurance industry in India has grown at a rate of 12.49% per annum. Currently, there are 63 insurance companies, out of which 39 operate in the non-life category and 24 operate in the life category. However, despite the growth achieved over the last ten years, the penetration of non-life insurance stands at 0.93% of GDP. As compared to its Asian neighbours, the country performs poorly in terms of density and penetration. Thus, a large section of the population does not have access to any insurance cover.
As the industry moves towards embracing technologies like AI, Big Data, Telematics, etc., it would be able to offer more customised products. This would help bring in more customers under the fold of insurance. The insurance industry is approaching a future that is touchless and automated- a future that is almost instant and does not require human intervention.
For instance, global tech giants are making progress towards a digitised future where the vehicle would file for the claim post-accident. The sensors in the vehicle would assess the damage and click off the supply chain, ensuring that it gets picked up and is repaired without the need for human intervention. In case of health insurance too, wearable devices can send the claim request post an accident thereby eliminating the need for human intervention.
Going back to where we started, fintech start-ups in the US have demonstrated that through the use of AI claims can be settled in a matter of 3 seconds. During these 3 seconds, the AI- powered chatbot interacting with the customer reviews the claim, cross-checks it with the original policy document, runs multiple fraud detection algorithms before sending payment to the bank. The enormity of this achievement can be gauged from the fact that before AI, these steps would take several days----that is the power of AI!
Indian insurers, too, are leveraging the power of AI to achieve customer satisfaction and bring efficiency into the process. From launching programmes for nurturing AI start-ups, partnering with AI service providers to developing in-house applications, domestic insurers are leaving no stone unturned to make the most of this new field of computing technology. The systems thus developed are diverse and infused with innovation. For example, a reputed car insurance provider in India has developed an AI-powered application to estimate the damage to a car through pictures.
The life insurance sector is also not far behind. Here, we find the application of AI across the spectrum, from data analysis, robotics process automation, risk analytics to intelligent fraud detection. However, in both sectors, we find the predominant use of AI for developing smart chatbots and virtual assistants.
While there is still sometime before AI and other technologies can completely revolutionise our insurance experience, the change has already begun. Digital technologies offer a world of infinite possibilities for the insurance industry. Till now, we have seen only a glimpse of what the future can, and only time will tell their full potential.