So the buzz on Artificial Intelligence is very, very real! I keep hearing that Artificial Intelligence and Machine Learning are the future. WAKE UP! It’s THE PRESENT. AI and machine learning has had an impact on every industrial sector possible. There is a reason why every tech giant out there is betting on AI/ML. We’ve read about how AI is affecting the health-care sector, the automobile sector, the customer service sector (AI based chatbots) and even the agriculture sector! But today I’m going to talk about how AI has an interesting impact in the financial sector, particularly, the insurance industry.
I recently read about how an insurance start-up settled a claim within a few seconds. And, believe me guys, there is another insurance-tech company that offers insurance based on selfies! Sounds too weirdly good to be true right? Well, it isn’t. In fact, it reflects a better future for both people buying insurance and companies offering risk products. Like food delivery, banking and cab- hailing apps, technology – or more specifically – artificial intelligence, is set to disrupt your insurance buying and settlement experience, forever. It’s a win-win scenario for both the insurance company as well as the customer. It’s an advantage for the customer mainly because they don’t have to go through the pain involved in claiming an insurance! ( Yes, we all know the struggle is real! ) For the companies, well, it will save them money, help them assess risk more accurately, prevent damage before it happens and process your claim very fast.
How artificial intelligence works?
Artificial intelligence works using a combination of tools! This includes everything from machine learning to natural language processing to text analytics to audio/video analytics! Information is wealth. The availability of more meaningful data about you through wearable devices such as fitness bands or sensors in your car/home or even more data through ‘smart city’ technology will help insurers come up with a more realistic assessment of you and the circumstances around you at a given point of time. This can also happen through data mining of your social data and medical history. This is great news because if you live a healthier life i.e. if you don’t drink or smoke, exercise regularly and don’t indulge in risky behaviour like driving without a seatbelt, the insurance company would be able to offer you the same cover at a much lower cost! Cool, right?
It’s pretty much the same when it comes to claiming a life insurance. Today, we trust drones to the hard work. The insurance companies could take full advantage of smart drones to assess the accident sites, estimate the damage and judge the circumstances! Smart devices can warn a user about a risky situation even before the insured enters one. The ideal scenario for any family is to not reach a stage where tragic circumstances require an insurance claim. More data through IoT (Internet of Things) devices, image recognition, video analysis can also help establish identity, thereby considerably reducing the possibility of fraud in insurance claims. What does this mean? This means, faster processing of claims, something good for a grieving family!
And when making full use of the relevant data about you, there is very less possibility of fraud that can be involved. AI based chatbots can be deployed to engage in a conversation with you, answering unending questions specific to you, perhaps much better than an old-world insurance agent. Personal identity can also be verified much faster helping you sign up and take an insurance policy online, in a few minutes. This is definitely going to bring about an evolution in the insurance industry.
What this means?
- Good news for both the insurance companies as well the customers.
- Accurate risk assessment that can save money.
- Lower fraudulent claims leaving more money for the customers in the insurance pool.
- Faster processing of insurance purchases and claims saves insurance companies money.
Of course, it is going to take some time before AI can be fully implemented in this sector. But, like I said, AI is not the future. It’s the present! AI is going to completely disrupt this sector guys! A truly win-win scenario.
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