We are fast approaching an important nexus for the insurance industry. Artificial intelligence (AI) and machine learning, wedded to automation and informed by big data, are bringing perceptible improvements for customers and carriers. Straight-through processing is reducing errors and costs, increasing consistency, and driving much swifter settlement of claims.
Excitement about the impact of AI transcends industries, but the potential benefits for insurance are particularly compelling. Little wonder, then, that 75 percent of the 550 insurance executives surveyed by Accenture believe that AI will either significantly alter or completely transform the overall insurance industry in the next three years. Here are five ways AI intersects with straight-through processing to drive value.
#1: A Path to Greater Efficiency
With the latest developments in AI and machine learning, the ability to add efficiency in the claims process by removing the need for human intervention starts becoming a reality. Today, policyholders are initiating the claims process, which can then be triaged, processed, and settled through leveraging technology. AI enables straight-through processing with the ability to capture the necessary damage details, audit the system, and communicate directly with customers.
By drawing on a set of rules and vast stores of data, AI can make accurate decisions quickly and consistently. It can also learn and improve over time, honing its decision-making skills. Simple and repetitive tasks are removed from claims handlers, freeing them to focus their expertise on areas of investigation, evaluation, and negotiation—in other words, areas in which they can add the most value. The boost in speed and efficiency that straight-through processing offers reduces costs for carriers while simultaneously improving the standard of service for customers.
#2: Improving Customer Service
The modern consumer wants access to everything digitally from any device that suits her. When asked what insurers can do to improve customer experience, respondents to a PwC survey listed “accessibility” as the top answer, closely followed by “tailor to customer needs.”
Straight-through processing enables around-the-clock support for customers with policyholder self-service for inventory creation and payment, which is very convenient. AI chatbots can answer specific queries, collect information, and pose pertinent questions to help advance claims. AI also has a role to play in tailoring the experience for customers when it comes to selecting the right level of coverage.
#3: Finding the Right Coverage
People want to feel that they are getting a custom service tailored to their needs rather than a vague, one-size-fits-all policy. Straight-through processing platforms can blend customer-submitted data with background information on locations, claims rates, accurate contents values, and other factors to identify precisely the right policy or mix of policies to fully cover any customer’s property. AI can also draw on customer profiles to personalize sales techniques and ensure relevancy.
There’s a greater understanding now of the potential effectiveness of AI, and people are ready for this kind of initiative. Seventy-four percent of consumers said they would be happy to get computer-generated insurance advice, as cited in Accenture’s study, “AI Reshaping Insurance.”
#4: Reducing Fraud
Fraudulent claims cost more than $40 billion every year, according to the FBI. When data science techniques are applied to vast quantities of claims data, it’s possible to start identifying patterns and uncover fraud with greater accuracy.
Straight-through processing can employ these techniques to score claims for fraud by flagging inconsistencies and suspicious elements without relying solely on the experience of a claims professional. This kind of technology can quickly and accurately identify potential cases of fraud that merit further investigation, which also frees up eligible claims for instant payment.
#5: Extracting Greater Value From Data
Data is the lifeblood of insurance carriers, but there is a great deal of room to better leverage existing data to extract important customer insights. When Accenture asked insurance companies about the benefits of embedding AI into user interfaces, more than half of respondents cited better data analysis and insight.
Customers are showing a willingness to adopt new sensors and share more personal data in return for reduced premiums and better coverage. The rise of telematics and other data-capturing systems not only helps to reduce the likelihood of a claim, but also allows carriers to collect more information that can be used to improve AI and fine tune straight-through processing.
The insurance industry is overdue for an overhaul, and that is one of the reasons why AI is poised to make straight-through processing a reality. The great thing about the adoption of AI and straight-through processing by carriers is that it’s not just about cutting costs or improving internal processes—it’s also about delivering a better customer experience.