AI is Revolutionizing Insurance: Here’s How

Introduction

The insurance industry is undergoing a profound transformation, and artificial intelligence (AI) is at the forefront of this change. While the potential of AI has been widely discussed, its real-world impact is already being felt across the insurance landscape. This blog post delves into how AI is revolutionizing key insurance functions, enhancing operational efficiency, and ultimately improving the customer experience.

Insurance: A Data-Driven Industry Embracing AI

Insurance relies heavily on data. From assessing risk and pricing policies to processing claims and detecting fraud, data analysis is crucial. Gen AI, with its ability to analyze vast amounts of structured and unstructured data, is a natural fit for the insurance industry. This adoption is further accelerated by the ongoing cloud migration and data platform modernization efforts within the sector.

With our extensive data expertise (over 25 years of enterprise data management experience) and a deep understanding of the challenges that AI can solve in the insurance sector, Bitwise offers advanced data and AI solutions for insurance to help achieve transformational results. Below are key areas that we’ve identified in working with Fortune 500 insurance customers where Gen AI is making a major impact.

Three Key Areas Where AI is Making a Major Impact

Artificial intelligence is rapidly transforming numerous industries, and the insurance sector is no exception. From streamlining intricate workflows to bolstering security measures, AI is proving to be a powerful catalyst for positive change. This section will delve into three key areas where Gen AI is currently making a significant impact within insurance: claims processing, underwriting, and fraud prevention.

• Claims Processing: The claims process is a critical touchpoint in the customer journey, but it’s often plagued by inefficiencies and errors. AI is streamlining this process by automating data retrieval and reconciliation from various internal and external sources. This enables faster and more accurate claims adjudication, reducing processing times and improving customer satisfaction. Bitwise offers data insights and analytics solutions to achieve business results by making insurance claims faster and easier using AI and ML techniques for data-driven personalized pricing models.
• Underwriting: The underwriting process can be lengthy and cumbersome, especially in life insurance. AI is accelerating this process by quickly gathering and analyzing customer information, enabling faster onboarding and more personalized policy offerings. The automated underwriting process opens opportunities to cover a wider range of individuals, including those who may have been previously underserved. We offer legacy data maintenance solutions to diagnose and fix data problems using custom quality checks and data validations to achieve optimal query performance and accuracy.
• Fraud Prevention: Insurance fraud is a significant challenge, costing billions of dollars annually. AI is enhancing fraud detection by analyzing diverse data sources in real-time, including claims histories, public records, and medical guidelines. This proactive approach helps identify and prevent fraudulent claims more effectively.

AI: Driving a Better Customer Experience

While AI’s immediate impact is often focused on operational improvements, the ultimate beneficiary is the customer. Faster AI-powered claims processing, personalized policies, and reduced fraud contribute to a smoother and more satisfying customer experience. AI is also enabling insurers to deliver more empathetic and efficient service, particularly during emotionally challenging situations like claim filing after the loss of a loved one.

Insurance companies trying to implement Gen AI use cases struggle due to issues like scattered data, long turnaround time and inability to assess data. We offer a proven methodology in our data platform modernization solution for transitioning legacy databases, database objects, data ingestion, orchestration and data visualization to the cloud using automation through each phase of assessment, code conversion and data validation – establishing a data foundation designed for AI success.

Other Key Trends Shaping the Future of Insurance

In addition to AI, other key trends are shaping the future of insurance:

• Consumer acceptance of AI is growing: Research indicates increasing comfort with AI-powered tools in insurance, particularly in areas like premium determination. A recent study published in InsurTech Digital illustrates the trend with “59% of UK respondents willing to accept fully AI-driven claims approval if it delivers accuracy and speed.”
• IoT is gaining traction: The growing use of activity trackers and other IoT devices provides opportunities for personalized insurance offerings and data-driven insights. Bitwise offers solutions to develop mobile applications that speed up processes, such as claims processing, and provide greater convenience, transparency and accessibility for customers.
• EVs and Sustainability: The shift towards electric vehicles (EVs) necessitates innovation in underwriting and risk assessment.
• ESG considerations: Environmental, social, and governance (ESG) factors are becoming increasingly important for consumers and investors, influencing insurance product development and investment strategies.
• Cyber risk management: As cyber threats evolve, robust cybersecurity measures are crucial for protecting sensitive customer data and ensuring business continuity.

Case Study of Solving Real Business Problems with AI

A leading Fortune 500 insurer struggled with inefficient and inaccurate data extraction from diverse unstructured documents, hindering claims processing. Bitwise developed an AI data analyzer solution for streamlined processes on claims platforms that addressed the challenge with an AI-driven solution built on LLMs and Databricks. The result: automation of key data point extraction, achieving 85% accuracy and dramatically accelerating quote turnaround by 90%, showcasing the power of AI in transforming operational efficiency.

Conclusion

By embracing these trends and adopting a strategic approach to technology integration, insurers can unlock new opportunities, enhance customer experiences, and thrive in a rapidly evolving market. The future of insurance is technology-driven, and those who embrace innovation will be best positioned for success. Contact us to learn how technology can transform your insurance business.

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