How AI could affect insurance industry
As the individuals near the peak of their careers, their spending habits increase, particularly on high-end products and technologies. When it comes to insurance, they want convenience and immediate solutions for their needs.
With the integration of artificial intelligence (AI), the insurance industry is fast adapting to provide solutions to meet the need.
International management consultancy McKinsey says AI could mimic the human mind when it comes to things such as perception and solving problems, which could transform the insurance industry and the way people buy insurance products.
Vera Nagtegaal, the executive head of online comparison website, Hippo.co.za, says there has been a significant shift in the insurance industry from detecting and repairing damage to predicting and preventing risks.
“Technological innovation is set to improve the overall customer experience, lower costs, increase productivity and speed up the process of interaction between brokers, consumers, financial intermediaries, insurers and suppliers.”
Nagtegaal says that, over the past few years, AI has been integrated into everything from cellphones, cars, watches and even household appliances.
“The data from these devices will provide more information to insurance companies, which will allow them to understand their clients better, leading to customised pricing and instant settlement of claims.”
Minimal involvement is required for customer and service provider, Nagtegaal says.
“Smart devices tracking driving behaviour will enable tailor-made pricing for car insurance and you could pay less for medical aid if you lead a healthier lifestyle. All client information is picked up by algorithms that create your risk profile, so buying insurance will be instantaneous.”
Claims could be settled in a matter of minutes, as user interface and digital claims adjusters will enable more efficient logging of claims and reduced processing times.
Nagtegaal says fewer people will be involved in the process, which could decrease the risk of fraud in the industry.
With new technology emerging daily, the insurance industry is experiencing a continued shake-up. Insurance companies will have to stay abreast of the latest offerings and make sure they incorporate AI into their products.
“The key is to adapt and create new solutions, in order to remain relevant and provide the best possible products and services for the needs of more connected consumers.”