The past few years have seen significant advancements in information technologies such as artificial intelligence, and the adaptation of such technologies have only further necessitated and accelerated as a result of the coronavirus pandemic. Applications for artificial intelligence technology are no longer exclusive to the tech industry, and today there are an increasing number of new products and use cases that allow businesses to leverage the wealth of digital insights the technology can provide.
The insurance industry is no exception to this. Those developing the technology have identified solutions to some of the most common pain points, and by embracing artificial intelligence, insurance providers large and small have the ability to create new efficiencies in their operations. From automating form-filling processes to assessing vehicle damage, artificial intelligence has the ability to help organizations dramatically reduce costs and time.
HAUSER Insurance, a national, full-service brokerage, seeks to create unique insurance solutions for organizations of all sizes from multinational enterprises to founder-led businesses. Focusing on the needs of private equity firms and their portfolio companies, HAUSER works to ensure fund managers understand and are protected from the increasingly complex risks that they face now and may in the future. Founded by Mark Hauser of Hauser Private Equity, HAUSER is optimistic about the positive changes artificial intelligence will bring to the insurance industry, opening up a number of new options that they can assist in exploring.
Repetitive task automation
According to a report published by the Future Today Institute on tech trends in 2022, the artificial intelligence technology known as robotic process automation is the most commonly deployed technique among enterprise companies. Through this technology, “software robots” can understand what is on a screen, complete the right keystrokes, navigate systems, identify and extract data, and perform a wide range of defined actions, and can also do so faster and with more consistency than people , without needed to get up and stretch or take a coffee break.
Human-effort-intensive tasks such as reading, writing, form-filling and sorting can take up large portions of a person’s time even though they often require minimal levels of training, education or expertise. In insurance, robotic process automation can be used to input and process claims, as well as provide scheduling services for appointments and answering basic and common questions through artificial intelligence. While some may fear that artificial intelligence will take the human element out of customer-facing industries such as insurance, in fact by automating repetitive processes such as these workers are able to develop more of their brain power to problem-solving solutions for their clients.
Predictive artificial intelligence in workplace injuries and system failures
Another form of artificial intelligence being implemented in businesses that could affect the insurance industry is predictive systems. The Future Today Institute’s report noted the Turkish company Intenseye has been utilizing computer vision models (the technology behind facial recognition) to detect 40 types of employee health and safety incidents in real time. Through the program, over the past two years the company says it has detected 1.8 million unsafe acts, enabling it to better understand where potential liabilities exist and what additional training or reinforcements may be needed. Similarly, the San Francisco-based company Voxel has begun using computer vision models to enable security cameras to automatically detect high-risk activities in real time.
Predictive artificial intelligence such as computer vision models can also anticipate and identify failures in places such as high-tech factors, airline manufactures and construction sites according to the report. Image recognition systems have the ability to monitor projects and automatically warn of potential errors or problems by comparing data from the real world to that of a digital twin. While the application of these technologies is not currently widespread, as artificial intelligence continues to become more accessible, whether or not a company uses them will inevitably have an effect on its risk calculations for both insurers and investors.
InsureTech improves claim filing and processing
Computer vision models are also being used within the insurance industry to better facilitate the processing of claims. By using artificial intelligence to assess damage and improve forecasts, time and costs associated with processing claims can be cut down significantly, in addition to simplifying the customer’s actions to report them. One example of this is the Vehicle Damage Inspection Model, a tool available on the AWS Marketplace which uses a machine learning model to determine what part of a car is damaged. The tool has the ability to drastically reduce the amount of time a human appraiser needs to spend on a vehicle analysis.
On an even larger scale, insurance companies can also use this technology to assess damage after a natural disaster. In Japan, insurance companies have been utilizing computer vision models in the aftermath of catastrophic weather events like typhoons, with the Sompo Japan company using the Tractable AI Estimating System to calculate the approximate repair cost of damaged homes.
From preventing insurance fraud to reducing the time claims adjusters must spend in the field and allowing them more time to interact with customers, artificial intelligence will certainly have a major impact on the insurance industry itself, changing the way it operates for the better.
Liability insurance for artificial intelligence
However, on the other side of the coin is the question of how to deal with the inevitable new challenges that can be presented as a result of information technologies. For example, self-driving cars present a new element to consider when assessing fault in an accident, and machine learning could potentially make a company more vulnerable to cyber attacks. In healthcare, artificial intelligence could fail to diagnose an ailment, resulting in the need for riskier and more costly procedures that could have been avoided had it been caught.
As businesses build out and implement artificial intelligence into their operations, the landscape of risk will change dramatically as a result. New insurance models will be needed in the future to address these emerging risks, and there are a number of solutions already being put into place. According to HAUSER Insurance, over 60 percent of cyber attacks are directed at small and medium-sized businesses, making cyber insurance an increasingly necessary consideration to be made when planning out coverage. Underwriters are beginning to include artificial intelligence within cyber insurance plans, and others are offering insurance for artificial intelligence applications.
New players in insurance
New players within the insurance industry are changing the game, offering specialized plans for artificial intelligence risks while also heavily utilizing the technologies themselves. Cyber Cowbell, a full-stack insurance company that provides cyber insurance to small and medium-sized businesses, uses artificial intelligence to monitor roughly 70 percent of companies in the United States market and figure out larger trends in usage and behaviors. It also provides monitoring analysis of its individual customers to assess their individual risk profiles, identifying that cyber risks are incredibly personalized business to business and therefore require a higher level of discernment.
As information technologies play larger and more significant roles in business operations, the insurance industry will need to keep pace in order to remain attuned to the needs of its customers. Companies must have foresight and look for ways in which they can integrate artificial intelligence, and insurance providers stay cognizant of these changes and adjust their own strategies accordingly.