Artificial Intelligence is being integrated into every facet of technology, from art and movies to advanced business models and analytics. With AI-powered assistants, businesses can streamline repetitive tasks and offload much of the busy work that slows down an employee’s day. This developing technology has let the world move at a faster pace, but one industry can still feel slow to clients—insurance.
With breaking AI advancements in underwriting, insurance agencies are exploring the future of AI in the industry. Some companies have started implementing AI into the way they process policies and have been seeing resounding successes, including faster turnaround times, reductions in errors, and better customer service.
The Process of Underwriting to Evaluate Risks
Underwriting is a process for assessing the amount of risk a potential policyholder might pose to an insurer. This can be time-consuming for the workers involved and often involves repetitive administrative tasks such as data entry. It can also consist of processing vast amounts of information, searching through and correcting documents, and answering emails. This process, though crucial for the insurer, can lead to long turn-around times. The repetition involved can also increase the likelihood of human error.
How AI Transforms the Underwriting Process
AI streamlines the underwriting process by automatically finding and extracting information insurers need to evaluate risks. By minimizing repetitive tasks, underwriters assisted by AI can focus on the parameters of their work most important for minimizing risks. This technology can also help human underwriters to locate errors. According to Forbes, AI has already been assisting underwriters in the auto insurance industry, speeding up the process and reducing associated costs.
A Better Insurance Experience Through AI
AI has the capability to not only improve the underwriting process but to create a better customer experience for policyholders. The same article by Forbes discusses how the insurance industry has traditionally held a reactive approach to customer service, rather than a proactive one.
One example cited by Forbes is how auto insurers adjust policies based on roadside inspections and crashes. When policyholders seek to renew their policies, they are often surprised by increases in their rates that are based on the previous year’s activities. With the real-time processing powers of AI, policyholders can be kept up to date on what impacts their rates as they happen. By being better informed through AI assistants, policymakers could potentially adjust their behaviors and make decisions that lead to better rates and greater overall satisfaction.
How AI Minimizes Risk for Insurers
While the use of AI makes the underwriting process more efficient, it offers additional benefits to the insurers that have been implementing it. One of these is the ability to reduce errors and minimize risks.
When underwriting is performed manually, the human worker must analyze large sums of data and check them against multiple data fields. As explained in an article by RGA, AI works alongside a human underwriter by automatically scanning and retrieving pages of application forms. If an applicant or agent mistakenly inserts incorrect pages, such as when mixing in another applicant’s information, AI can spot these errors faster. AI can also perform automated searches for inconsistent or contradictory information within an application.
New Speeds Made Possible Through AI
Insurers adopting AI into their underwriting processes have been seeing increased underwriting speeds and improved turnaround times for their applications. One insurer enjoying these benefits is Billyard Insurance Group.
When faced with difficulties in expanding their operations, Billyard Insurance Group opted to implement Precision, their own AI-powered underwriting platform. By analyzing new policy submissions against complex underwriting guidelines, Precision has reduced Billyard Insurance Group’s new business submission time by 75% and underwriting time by 50%. With these impressive speeds proving the success of Precision, Billyard seeks to further implement the platform across operations, possibly expanding it from Ontario to nationwide.
Working to Establish Trust Through AI Implementation
Underwriting has long been viewed as an opaque process by policyholders, as they wait for their insurers to generate their quotes based on many factors that can be unknown to them. Dave Brooks with Billyard Insurance Group sees AI as having the potential to bridge that gap in information.
“Picture the ability for a customer to interact with us through AI,” Brooks states,
“and have immediate answers through a model that has been taught by millions of insurance documents, that has all of their information, has all of the market guidelines, has all of the data on what the risk might be.” With a guided conversation from a licensed broker and an AI available to answer any questions that arise, Brooks sees this new platform as a means for facilitating better relations between customers and insurers.
AI-Powered Automation in Underwriting and Beyond
Many parts of the insurance process, including underwriting, have a history of being long and arduous, occasionally causing frustration for clients. New advancements in AI have the potential to transform both underwriting and the insurance industry at large.
Insurers have experienced success through the implementation of AI-powered underwriting platforms. With better turnaround times, a reduction in errors, and a greater customer experience, AI might be the future of how insurers serve their clients.
