Can AI Technology Help Insurers Manage Risks

The insurance industry is governed by many processes, rules, and subprocesses. These individual processes rest upon critical decision making, sets of manual tasks driven by people, weighed down by additional factors. The sheer complexity of the ecosystem mandates that large vigilant teams lead insurance companies, always staying one step ahead – of customers and competitors.

Should they underwrite the policy? What kind of risk are they willing to take? How much can policyholders be charged for taking on the risk? Will accessory factors mitigate the risk, and what are they? In the event of a claim, who gets covered by the policy, and for how much?

Insurance professionals – irrespective of the product or risk – are constantly making these critical decisions daily and doing it for multiple customers. From the outside, these decisions may be simple, but breaking them down exposes the true extent of their complexity. Be it simple details such as the policyholder’s name or the status of a claim, these questions and the decisions that arise from them help determine everything; whether a subrogation opportunity exists, a claim is a high risk, or even if potential fraud is happening.

Given this level of intricacy and the weight of decisions, are there better ways for insurers to follow due process? For example, can the basic tasks be taken care of while insurers focus on delivering better service or handling more complex claims?

The answer is YES.

Technology is the game-changer, the pivot that makes the industry more proactive than reactive. Deloitte’s 2021 insurance industry outlook shows us that extensive use of technology helped insurers leverage remote working capabilities and tools during the Covid pandemic. However, artificial intelligence will take it up a notch. A force multiplier for time management and critical decision-making, A.I. gives purposeful insights into cases like priority claims so that someone can take quick action to mitigate and reduce the severity. A.I-backed insights and predictive analytics engine Charlee™ reveals deeply insightful operational data insights with 80% accuracy. It can even predict the trajectory of a claim allowing interaction before unnecessary costs accrue.

Before embarking on any analytics or A.I. journey, there are 3 parameters Charlee recommends for successful implementation which generates ROI, reducing employee friction, and improving operational efficiency;

• Define a financial KPI (for e.g. reduce litigation by 5%, loss expenses by 8% etc.)
• Define KPIs that will help achieve the above
• Define Actions to be taken with above KPIs, including associated success criteria

A.I. has become a ubiquitous part of our daily lives. Everything from the steps we walk to the foods we eat, can be mapped to chalk our way towards an intended goal. Why then can’t this technology be leveraged to make the work of insurers simpler, policy holders better, and insurance professionals more purposeful?