Artificial Intelligence (AI) is a blanket term that bundles evolved technologies that have helped humans program machines to perform tasks better and faster so humans can focus on what they do best. In India, Artificial Intelligence in insurance is currently utilized by InsurTech organizations to gain a competitive edge in today’s digital-first world. By applying machine learning, data modelling, and predictive analysis to the insurance distribution value chain, AI has helped improve customer experience and optimize insurance distribution.
AI Impact in the InsurTech industry
While many industries embraced technological advancements earlier, the insurance sector has been slow to seize the opportunities. However, COVID-19 brought about dramatic change to this situation. The unfortunate surge in the number of medical emergencies and insurance claims enforced technology into the insurance sector and highlighted the benefits of AI in insurance.
With faster claims TAT, chatbots, and wellness integrations, AI is future-proofing insurance one customer at a time. As the InsurTech industry grows, so do the AI-related trends that are laying solid foundations for the future:
- Connected devices and data
Equipment with sensors has grown tremendously over the past. The use of connected consumer devices is on an upward trend at the moment, with no sight of slowing down. While existing devices, such as cars, fitness trackers, home assistants, smartphones, and smartwatches, will rapidly increase penetration, new sensory device categories, such as home appliances, medical devices, apparel, etc., will also emerge.
With the consistent increase in connected devices and the downpour of data these devices will bring in, insurers will be able to understand their consumers better and their needs – resulting in the rise of new product categories, hyper-personalization in products and prices, with realistic real-time delivery. This will be particularly evident in AI in motor insurance and AI in health insurance.
- Prevalence of robotics
Advancements in the field of robotics have changed the way we interact with the world around us. With these new essential hydraulic and robotic devices reshaping manufacturing and commercial insurance, insurers will be required to assess the changes in risk assessments.
The impact of AI in insurtech is an important factor in these risk assessments, particularly as programmable drones, autonomous farming equipment, surgical robots, and cars with self-driving capabilities become more prevalent in the next decade. Insurers must analyze the growing presence of robotics in everyday devices across industries and how it will shift risk pools, change customer expectations, and enable new products and channels.
- Open-source ecosystem
As data becomes omnipresent, open-source protocols will transpire ensuring that data is shared and used real-time across industries. Numerous public and private entities will join forces to create open-source ecosystems to share data for multiple use cases under a common regulatory and cybersecurity framework.
Wearable data, for instance, would be directly ported to insurers, and connected home and auto data could be made available through Amazon, Apple, Google, and various consumer device manufacturers.
- Cognitive technologies
Deep learning technologies, such as AI in insurance use cases, are based on the human brain’s ability to learn through inference. In the current world, cognitive technologies, including AI in insurance use cases, are primarily used for image, voice, and unstructured text processing. However, the applications of these cognitive technologies, including AI in insurance use cases, will evolve over the decade. With the increase in data mounts, these technologies will become the standard approach for processing insurance products tied to an individual’s behavior and activities.
As advanced technologies, grow commercially, insurers will have more information to constantly learn and adapt from – enabling new product categories and customer engagement techniques that better respond to shifts in underlying risks in real-time.
Prepare for the InsurTech future
Insurers have no choice but to embrace the tectonic shifts in the industry and the integration of AI in insurtech. All businesses will benefit from participating in the IoT ecosystem at scale to harvest better insights and utilizing AI technologies. In addition, insurers will need to begin the implementation of a coherent AI strategy in insurtech that covers all elements of a successful business, mainly data capabilities, organization and talent, and change management.
Rapid technological advancements in AI over the coming decade will bring about disruptive changes in the insurtech industry. Only businesses that view these technological advancements as opportunities instead of viewing them as a threat to their current company will thrive in the future of the insurtech industry with the implementation of AI.