Process Streamlining, Fraud Detection and Other Uses for AI in Insurance

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The AI ​​revolution has changed the insurance industry, with insurers using AI to streamline processes, including complaints, as well as to combat fraud.

Clearly, AI has a place to help insurer operations. Capgemini Research shows that underwriters spend between 41% and 43% of their time performing administrative tasks such as data entry and record keeping. This means that more time is spent on these manual processes than on core activities; only one-third, 32% to 33%, of underwriters’ time is spent on core responsibilities such as risk assessment and premium calculation, and 25% to 26% is allocated to agent-broker sales and collaboration activities.

Organizations that have implemented AI, including automated and data-driven underwriting decision-making, shows significant gains in speed, reduced expenses and improved target attainment compared to other insurers, according to Capgemini. These insurers are also seeing improvements in fraud detection and loss cost management.

Read more: AI is a top priority, but preparation lags behind for insurers

“One of the things they like about technology artificial intelligence what it does is democratize some of that knowledge,” said Caroline Bedford, executive director at EDII, in an In Send message webinar. “Clearly, people skills, emotional intelligence and face-to-face relationships are indispensable. Absolute. But now we have really great language models that can be specific to your organization, that can share knowledge with alumni or people who are building experience. “

AI-based predictive models that use damage detail photos from claims can predict losses more accurately and consistently, according to Don Jones, senior vice president, claims planning and delivery at Allstate. For car claimsthis allows carriers to “get our customers back on the road faster in terms of faster cycle times, more efficient processes and ensuring we’re handling their claim accurately,” he added.

Read more: Using digital solutions in the broker space and beyond

AI can help with detection insurance fraudbut the same technology can be used against insurers to file fraudulent claims. Instead of using Gen AI to manipulate damage photos for claims, a bigger problem is using it to falsely identify policyholders making claims. Synthetic IDs, which are fabricated identities not based on real people, are used to file claims, Karen Jennings, manager of the special investigations unit at American Family Insurance, told Digital Insurance. Michael Shashoua.

“They misrepresent their information to the insurance company to get a policy, and then depending on the carrier, either the claim gets paid or they get red flags that they’re not a real person,” Jennings said. “Every case is a different scenario.”

Read more about how the insurance industry is using AI.