Insurers are being urged to invest in artificial intelligence after a recent study showed it could lead to a significant rise in revenue for their businesses.
According to Accenture’s Future Workforce Survey, firms that commit to AI at the same rate as top-performing companies could enjoy an average revenue increase of 17% by just 2022.
However, in order to enjoy the potential returns, insurers must also leverage what Accenture calls “applied intelligence” – that is, collaboration between humans and machines.
“We believe AI, when synthesized with human ingenuity across the enterprise, will achieve exponentially more,” reads the report. “Used in this way, insurers will gain the ability to solve complex challenges, develop new products and services, and break into or create new markets.”
“There are many applications of artificial intelligence that insurers can leverage. Many of these can make the insurer more efficient and also enable better experiences – for customers, employees and intermediary partners,” he told Insurance Business.
“There will be a positive impact for brokers, who will benefit from faster underwriting decisions, greater transparency and new options for claims and other servicing processes.”
Malhotra also said that, in general, insurers that are making strategic investments to leverage emerging technologies and data will have an advantage given changes in customer expectations and behaviour.
“These insurers will be in a better position to offer relevant and differentiated products and services and will also be in a better position to consistently provide seamless and personalised customer service,” he said.
Malhotra also outlined that there is potential for AI to create better customer outcomes - which in many cases would mean preventing a loss in the first place.
“This could positively affect the industry’s reputation. However, AI needs to be carefully trained to avoid biases which could have unintended consequences,” he said.
“The fuel for AI is data and lots of it. Just like cars, to run properly, AI requires fuel that is clean and fit for purpose. AI solutions trained on data that is incomplete, misrepresentative or biased will make decisions that would be obviously incorrect to a human.”
While Accenture’s report focuses on the potential benefits AI and applied intelligence can bring to insurance companies, Malhotra says smaller firms and independent brokerages can also take something away from the study.
“AI has the potential to greatly enhance the effectiveness of brokers – allowing them to increase the level of personalisation that they can provide their customers and allowing them to provide a service at any time that is convenient for customers,” he said. “Currently, this is highly constrained by the limits of humans and much of the existing technology used in brokerages.”
Of course, few – if any – brokerages have the same budgets as the major incumbents but Malhotra says it’s possible to adopt AI on a smaller, more affordable scale.
“There are a growing number of AI offerings which are available to smaller businesses,” he said. “For example, customer relationship management (CRM) and other enterprise software providers are now embedding AI capabilities into their offerings.
“Additionally, narrower applications of AI are available for smaller businesses that are focused on marketing or servicing.”