Why the Insurance Industry Is Embracing AI

By Evan Dashevsky, Senior Writer
March 5, 2019 • 2 minute read

Providing or securing insurance is a complex undertaking, which requires responsive customer engagements and rapid resolutions. Fortunately, AI is well suited to optimizing processes within complex business environments.

Much has been written about the potential of Artificial Intelligence (AI) to transform the insurance sector. Indeed, AI is uniquely suited to deliver unprecedented efficiencies to complex digital systems through intelligent frameworks such as Amelia AIOps (formerly 1Desk) or by lowering the bar of access to these systems through intuitive interfaces like the industry-leading virtual agent, Amelia.

Forrester Research notes the importance of providers to prioritize digital transformation within all parts of their operation: “To win in this new world, digital insurance strategy leaders must reinvent their companies as fundamentally digital — and virtual — from underwriting through to claims settlement. Smart insurance companies will continuously exploit digital technologies both to create new sources of value for customers and to increase operational agility in service of customers.”

McKinsey in a report reinforced the importance of providers implementing a robust AI strategy in order to remain competitive in an evolving marketplace: “As AI becomes more deeply integrated in the industry, carriers must position themselves to respond to the changing business landscape. Insurance executives must understand the factors that will contribute to this change and how AI will reshape claims, distribution, and underwriting and pricing. With this understanding, they can start to build the skills and talent, embrace the emerging technologies, and create the culture and perspective needed to be successful players in the insurance industry of the future.”

AI-powered transformations aren’t merely theoretical, these new technologies are already upending the way that companies operate and administer services.

The shift toward AI has also become an imperative of insurance decision makers. According to a survey by Accenture of insurance executives from around the world, 75% of respondents agreed that “AI will either significantly alter or completely transform the overall insurance industry in the next three years,” with 32% of respondents saying that their own company would be “completely transformed” by AI within that same timeframe.

AI can be applied in different areas all along the coverage value chain, from user engagements to claim automation to quote-to-cash functionality. All it takes is the will of enterprise decision makers, the work of a dedicated internal team and the right partnerships. But AI-powered transformations aren’t merely theoretical, these new technologies are already upending the way that companies operate and administer services.

For example, a major insurance provider has been able to build new business value by augmenting and/or automating many consumer-facing processes with AI. In September 2017, the company deployed Amelia as a whisper agent at their call centers in order to reduce call times while subsequently increasing customer satisfaction. Amelia now averages more than 250,000 conversations per month and is currently used by 75% of call center employees. Furthermore, average call duration has been reduced from 4.6 to 4.2 minutes (which is a massive cumulative time savings when considering high call volumes) and 75% of customer inquiries are solved during the first call, which is up eight percentage points from before her implementation.

The implementation has provided other benefits such as reduced training time for new human agents, and Amelia also ensures that all agents comply with state and federal regulations, as procedures can be updated instantly at scale as needed. Following the success of the whisper agent implementation, the company is developing direct agent support in areas of Risk and Endorsements, which will be launched this year.

AI allows insurance providers to optimize consumer-facing and internal processes. Moving forward, there will be widening divide between the AI-haves and the AI-have-nots, and it is incumbent upon decision makers at insurance companies to make sure that they are on the right side.

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