By Tabrej Khan, CTO, Anand Rathi Insurance Brokers Ltd.
Technology has been instrumental in shaping the post-COVID world, enabling businesses and individuals to adapt to new ways of working and living. The pandemic expedited the adoption of digital technologies across all sectors, ushering in lasting changes.
The Insurance Regulatory Authority of India (IRDAI) has taken significant strides to promote and integrate technology into the insurance sector. They’ve established a sandbox environment for insurers to experiment with new technologies, with a clear focus on enhancing efficiency, customer-centricity, and inclusivity.
Technology and AI are revolutionising insurance solutions, making the industry more efficient, customer-oriented, and innovative. This transformation facilitates outreach to underserved populations, offering them accessible and affordable insurance products. Customers now enjoy a seamless insurance experience across various platforms, thanks to technological omnipresence.
Furthermore, technology and AI are pivotal in enhancing cybersecurity measures, safeguarding both insurance companies and their customers against cyber threats. By leveraging technology, the insurance industry is contributing to a more sustainable future, creating new products and services centred around sustainability, and educating customers on sustainable practices.
The latest sensation Generative AI (GenAI) is a type of artificial intelligence that can create new content, such as text, images, and code. It is trained on massive datasets of existing data, which it uses to learn patterns and generate new content that is like training data.
In today’s landscape, there is a plethora of insurance solutions powered by Technology and AI. Here are some specific examples:
– Underwriting & value-added services
AI analyses vast datasets, including historical claims, telematics, medical, lifestyle, and social media data, to accurately assess and price risk, resulting in more personalised coverage for customers.
Predictive analytics employs machine learning to identify patterns and trends, predicting customer risk and fraud. This information guides precise policy pricing and fraud prevention.
Insurers are increasingly utilising IoT devices to collect data, enhancing underwriting, claims processing, and risk prevention. For example, IoT devices monitor the condition of insured items, identifying potential issues before they escalate. Similarly, wearable devices can measure health vitals, and if any abnormalities are detected, a trigger can be initiated to inform the insured and extend support.
Tasks that once took hours or days are now executed in seconds through AI-powered processes, such as computer vision technology for instant policy issuance & claim admissibility.
Telematics devices track driving behaviour, allowing insurers to offer discounts to safe drivers and identify higher-risk drivers.
– Claims Processing and Customer Service
AI automates various claims processing tasks, expediting the process, and reducing costs for insurers. Computer vision and algorithms enable immediate liability assessments through uploaded accident vehicle pictures.
Claim admissibility based on policy coverage is now prompted by the system. Pre-authorisation approvals for health claims in hospitals are made instantly.
AI also identifies and prevents fraudulent claims, examining images of damaged property for potential fraud.
– Product Development
AI assists insurers in creating innovative products tailored to evolving customer needs. Personalised insurance products based on individual risk profiles improve overall health outcomes, reducing the need for costly interventions later in life.
AI-driven parametric insurance pays out predetermined amounts based on specific events, such as natural disasters or supply chain disruptions.
AI is used to develop cyber insurance products that are tailored to the specific needs of individual customers.
Farmers Insurance is using AI to help customers detect and prevent water damage to their homes.
– Cybersecurity and Regulatory Compliance
Technology ensures compliance with evolving regulations. AI systems monitor policies and procedures for legal adherence. Insurance companies use these technologies to respond to cyber threats, safeguarding networks, and systems swiftly and effectively 24/7.
Technology aids insurance companies in identifying and mapping all personal data, crucial for compliance with data protection regulations.
Encryption is used to protect data at rest (stored on a disk or other storage device) and in transit (being transmitted over a network).
Network segmentation can help to improve security by isolating sensitive data from the rest of the network.
– Sustainability
Insurers reduce paper consumption by digitising applications, policy documents, and claims forms, saving resources and costs.
Online self-service options reduce the need for physical visits, conserving energy and reducing emissions. Cloud computing further aids in reducing energy consumption and emissions.
In conclusion, the integration of technology and AI in insurance solutions represents a significant leap forward in revolutionising the industry.
These advancements not only enhance operational efficiency but also empower insurers to offer more personalised and accessible services to their clients. As we move forward, the continued evolution of these technologies promises even greater innovation and value in the insurance landscape.
