AI technology, improving efficiency and enhancing the customer experience in insurance.
Traditionally, the insurance industry - a business founded on caution, a hedge against risk - has been slow to adapt. Heavy regulation and bureaucracy, compounded by the 2008 global financial crisis and the 2020 Covid-19 pandemic, has put pressure on balance sheets and left insurers operating on ever-tighter margins – facing risk in their own businesses. While at the same time, the digital era of self-service, instant quotes, dynamic pricing, and tailored products, has caused customers to become increasingly demanding, with rising expectations of the insurance experience and product personalization.
The historic confluence of these changes is forcing the industry into a period of radical change, with a large part of this shift being influenced by one key technology: Artificial Intelligence.
The insurance business has always been a data business. And AI feeds and thrives on data. Consequently, forward-looking and tech-savvy Insurance companies are increasingly turning to AI systems and solutions to help minimize operating costs, maximize sales, and reduce fraudulent claims as well as improving and delivering a transparent customer experience.
Insurance transformation – why apply AI?
Today, AI is already transforming the insurance industry.
- Driving enhanced efficiencies: The insurance industry is heavily process-oriented and significant cost reductions can be unlocked with process automation. Additionally, AI’s ability to learn over time amplifies the cost reductions possible from process automation. While existing RPA automation systems yield roughly 20% cost reductions, machine learning-based Hyper-automation results in savings of approximately 60%.
- Combatting fraud: AI is already proving its abilities to fight fraud in the financial sector, where its aptitude for pattern recognition excels at identifying suspicious transaction sequences. In insurance, AI is set to combine this capacity with the ability to integrate traditional structured data with unstructured data like images and social media, flagging the same image being used multiple times in insurance claims for example.
Enhancing the customer experience and improving driver safety
Car insurance claims currently rely on the drivers’ subjective accounts of the accident. Accuracy may suffer from drivers’ emotional states, as well as the time between the event and contacting the insurance company.
For instance, Aioi Nissay Dowa Insurance is utilizing Fujitsu’s AI-based image recognition technology to record an accurate, objective version of events to halve processing time for insurance claim payouts. Ultimately, this partnership aims to use AI technology to prevent accidents from happening in the first place. And this is just the beginning.
AI technology and the future of insurance
AI is set to reimagine the insurance industry.
- Switching from reactive to proactive: By establishing an agile, AI-enabled, real-time data infrastructure, insurers will be able to move from ‘repair and replace’ to a far more cost-effective ‘predict and prevent’ model. In essence, the predict and prevent model works by analyzing vast tracts of data to find patterns in the causes of particular risks. By identifying the beginnings of those patterns in real-time data, interventions can be made before the pattern plays out.
- Modelling emerging risks: AI equips actuaries with huge volumes of data, in real-time, enabling them to dynamically model novel risks as they evolve, using the same techniques for prediction and prevention not just at a customer level, but also at a macro-scale. This could account for emerging and unprecedented risks such as cybersecurity, climate change, autonomous vehicles, or mass distraction of drivers by persistent smartphone notifications, for example.
Fujitsu AI: The benchmark for responsible AI
While Fujitsu AI is not the only AI solution on the market – it's definitely unique. We focus on real, human challenges and develop AI solutions to match - an approach we call human-centric AI. We:
- create value
- build AI into existing processes
- employ trustworthy AI
- deploy quickly.
And through this, there’s the opportunity to transform process efficiency, enhance customer experience, innovate new business models, and improve sustainability in the insurance business. Read more about the possibilities for AI in the insurance sector and Fujitsu’s human-centric approach to AI in our whitepaper: How Artificial Intelligence is making insurance work better for everyone.