Artificial Intelligence (AI) and Insurance Compliance
Artificial Intelligence (AI) has taken the world by storm. Chat GPT3 and 4, Midjourney, Alpaca, and Bing are just some of the iterations of the never-ending parade of smart chatbots which can do almost anything.
Knowledge, interpretation, translation, analysis, and insights, to name a few, are among the most important capabilities of Artificial Intelligence. And this is just the beginning, the early stages of development. The future is limitless.
Furthermore, all of these capacities are put in use in insurance in claims management, certificate tracking, correct certificate issuance, optical character recognition and automations.
The potential benefits of AI in insurance are vast, from improving underwriting accuracy to enhancing customer experiences. However, with new technologies come new challenges, and AI is no exception. As the industry continues to embrace AI, it is essential to understand the opportunities and challenges that come with it.
In this article we will explore how Artificial Intelligence is being used for different aspects of insurance and what the future is bringing.
Opportunities generated by Artificial Intelligence in Insurance
The big hope for Artificial Intelligence is its ability to free employees from the mundane so they can do what they do best, solve problems using creativity. In the case of insurance, Artificial Intelligence can be positively used for:
Evidence Gathering:
When the insured sends evidence to the insurer, Artificial Intelligence can determine the type of occurrence or claim. This means that Artificial Intelligence can determine whether the occurrence seems negligent and the best way to manage and centralize that evidence in a single location.
Efficient Communication
Bringing artificial intelligence to the table helps improve communication by making the message clearer and to the point. This lowers the chance of ambiguity and misinterpretations which helps transparency and improves relationships with the insured.
All-around Automation
Automation is a great time saver, and Artificial Intelligence makes it possible by allowing you to program ahead. Set up parameters, and Artificial Intelligence will follow your lead. This makes it possible to automate communications, notifications, status updates, and so on, leading to a much more streamlined process. For example, the insurer needs the insured to comply with requirements. They set up automation to handle this type of situation, so when a requirement is not fulfilled, the insured gets an email or notification saying they need to meet X, Y, Z requirements. From this moment on, the insurer gets to concentrate on bigger issues, knowing that the automation will take care of non-complying insureds.
Optical Character Recognition
Artificial Intelligence and Machine Learning help digitalize documents. Instead of making them mere copies that can only be handled as images, OCR reads documents and make them completely digital, therefore editable with digital tools. This saves tons of time and pushes file cabinets out the window.
Predictive Analytics
AI can help insurers predict customer behavior and identify potential risks. By analyzing historical data, AI can help insurers make more informed decisions about pricing and risk assessment.
Customer Experience
AI-powered chatbots provide customers with quick and personalized assistance. By using natural language processing (NLP) and machine learning, these tools can understand customer inquiries and provide helpful responses.
Challenges when dealing with Artificial Intelligence
As with every new tool—especially with technological tools—there are detractors and resistance to change. This is not bad since it invites everyone to reflect on how tools are used and the unintended consequences of those tools.
However, it is important to know that a tool is a tool. The use that tool receives depends on the people who are using it.
While AI presents significant opportunities for the insurance industry, there are also challenges that insurers must navigate to successfully implement it.
#Challenge 1: Artificial Intelligence looks harder than it is
At first glance, it can look hard to pull information out of these tools. How can you use it? Can you trust what it is saying? How do you make it do things? These questions answer themselves easily once you start using each tool. Artificial intelligence is meant to be very user friendly, and they are supposed to supply what the user needs when they need it. It’s a matter of watching it in action: to realize it may look hard at first but, like any other tool, there’s a learning curve and then it’s smooth sailing.
#Challenge 2: It can be scary for some people
This is particularly true for Artificial Intelligence; perhaps more than any other technology. Artificial Intelligence generates anxiety and fear—no more than around people losing their jobs.
It’s true that Artificial Intelligence is believed to bring as big a change as the industrial revolution did. It is also true that there are always limitations and new exciting possibilities with change (just like those born by the Industrial Revolution).
The biggest limitation with AI is what we call a developer. Without a human developer, Artificial Intelligence just can’t work or develop itself further. AI does have its limitations and it can’t replace the creativity and ingenuity of humans to solve problems and encouragement advancements (well, not yet!).
Implementation is a process in itself
How to use AI needs to be agreed upon all through the business. Whether you are using it through a third-party app, like Bing incorporated chat GPT, or proprietary cloud native software. This needs planning and management. The good thing is that once it is done, it’s done.
- Data Quality: AI relies on data to make accurate predictions. So, it’s important to have the AI go to reliable sources.
- Regulation: As AI becomes more prevalent in the insurance industry, regulators are starting to pay closer attention to its uses. Their use of AI must comply with relevant laws and regulations, which vary by jurisdiction.
- Ethical Considerations: AI can raise ethical considerations. Therefore Insurers must ensure that their AI systems are designed and implemented in accordance with ethical considerations.
Artificial Intelligence is the future of insurance
No matter how you feel about it, AI has risen as the latest technological revolution. It’s impossible to know what will happen, but every road in every industry is pointing to the use of Artificial Intelligence.
This is true even more so for the insurance industry as AI is expected to have an immense impact in productivity and efficiency right now, and into the future.
Artificial Intelligence presents both significant opportunities and challenges for the insurance industry. That’s where SmartCompliance comes in. SmartCompliance uses AI based Optical Character Recognition and Workflow automations for Certificate of Insurance Management.
With SmartCompliance, insurers can focus on delivering the best possible experience to their customers while making sure they are fully compliant with regulations. To see SmartCompliance in action, and learn more about how our platform can help your organization, schedule a demo today.
