In recent weeks, artificial intelligence (AI) experts from across the world have warned that AI is a threat to human existence. Meanwhile, the world’s companies, including insurance firms, are busy integrating AI into their computer systems.
In a recent interview with Insurance Business, Neil Morgan (pictured above), Insurance Australia Group (IAG) COO, said AI is already playing a significant role in his firm’s digital deployments.
“Our ability to use AI type models to assess losses is a capability we reuse everywhere,” said Morgan. “The same capability is applicable for claims regardless of where they originate.”
At his firm’s recent Investor Day, the COO said this AI capability is now used across IAG’s direct and intermediated insurance divisions.
Morgan said IAG has invested significantly in both addressing issues of complexity in the insurance process and also dealing with legacy architecture. “Embedding AI in the claims process,” he said, and using it to help provide insurance quotes, is already a big part of this investment.
He suggested this new technology was an important facilitator for merging the 16 claims platforms used by the firm in 2020, down to only one this year. Morgan said this transformation of the “core” of the claims process is now completed and allows for the ongoing deployment of numerous digital tweaks and upgrades.
“It’s where the magic happens,” he said, referring to what his firm calls its new Enterprise Platform This has created an environment, he said, for thousands of digital deployments on top of this transformed core.
“How we do personalization and automation and use of AI,” said Morgan, “I think that’s how we will become more and more digital, not through one big change.”
In the direct business, he expects this upgraded system to be rolled out over the next 12 to 18 months. Morgan said it will replace legacy systems used by two thirds of IAG’s personal lines customers across Australia and New Zealand.
More directly relevant to brokers, the same capabilities in personal lines streams, he said, are being used with “one of our partners in our intermediate business in Australia.”
The motor claims space is a particular focus for IAG’s use of AI technology.
A slide in Morgan’s Investor Day presentation detailed how embedded AI has brought the duration of IAG’s total loss motor claims process down from numerous days to “hours.”
In a recent IB interview, the COO gave more details on how AI enhanced digital capability is being deployed on top of a transformed core in the motor claims space.
“When a customer logs a motor claim and the vehicle is ultimately repaired or assessed - in some cases a total loss and then replaced - that was a manual process,” he said. “The total loss assessment of that can take two to four weeks.”
However, Morgan said “by deploying AI” in the process, claims timeframes are down to about two days “in many cases.”
“We’ve seen that AI operates at very high levels of accuracy, over 90% accuracy, and it gets better over time,” he said.
This improved motor claims process, Morgan said, has seen NPS [Net Promoter Score – a way of measuring customer loyalty] ratings go up by about 10 points.
“It’s [the AI enhanced motor claims process] both helpful from a customer experience perspective, hopefully from a broker perspective, in terms of their relationship with customers, but also it has an efficiency side to it for us,” said Morgan. “So reduced operating costs in towing and assessments and turnaround times.”
However, stakeholders in the intermediated motor claims space say some insurers can take weeks just to respond to motor damage claims. IB asked if this claims process also applies to IAG’s intermediated motor claims customers?
Morgan said his firm’s upgraded motor claims capability is “applicable for claims regardless of where they originate.”
Other industry stakeholders are also making AI led improvements in the direct and intermediated insurance claims spaces.
In a recent webcast, technology company EXL said its deploying AI that helps brokers review document fields for data completeness, security, and compliance before they submit them to insurers. The firm’s AI tech, it said, can also help claims adjusters access claim summaries and retrieve information more quickly.
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