How AI, ML Are Revitalizing The Insurance Claims Process

The insurance industry has a reputation for slow procedures and even slower payments, and the claims process still often requires customers to deal with depositing physical checks.

But such services are becoming more digital than ever as customers become less keen on paper-based systems and their accompanying wait times. Insurers are still playing catch-up when it comes to offering the speed and convenience consumers want, however.

Firms must first and foremost bring the claims experience into the digital world. These services should be as quick and personalized as other digital offerings, such as rideshare or shopping platforms. This is where artificial intelligence (AI) and machine learning (ML) are beginning to emerge as critical tools that allow industry providers to better compete and satisfy customers.

A recent study revealed that 87 percent of insurers are looking to invest more than $5 million in AI before 2020, and more than half are considering using the technology to innovate their processes.

Insurers view AI as a tool with the potential to support everything from speedier payments to fraud protection. A separate study predicted that this technology would enable a cost savings of $2.3 billion within the same year.

Customer payouts and disbursements remain some of the more intriguing insurer use cases for both AI and ML solutions. Both technologies can be applied to front- and back-end processes, such as creating consumer-facing, AI-powered chatbots or streamlining the claims process behind the scenes.

AI, Insurance and the Future of Digital Claims

AI-powered chatbots, algorithms and additional tools are becoming prolific in the insurance world, and customers now rely on such technologies to enable many processes that were traditionally paper-based.

Mobile renters’ insurance app Lemonade relies on an AI-enabled chatbot and mobile app for customer engagement and fast claims, for example. Customers start claims by conversing with the app’s AI-enabled agent, Jim. Customers can use the chatbot to finalize their claims, and the information is then routed through Lemonade’s database to match specific instances against similar claims to ensure legitimacy.

Several business-to-business (B2B) solutions are enabling similar services for those on the insurance company side, with firms like Elafris providing digital assistant products that allow insurers to create AI-powered, consumer-facing chatbots. Its offering allows insurers to accept payments and claims through assistants, a process that is fast becoming one of the industry’s top applications of AI technology.

Some firms are moving away from chatbots and are instead examining how AI and ML could help them simplify claims by processing images and visual data. Auto insurance AI provider Tractable offers such a service for insurance agencies, using image-based technology to help insurers process accident-related damage and estimate how much money is owed to end customers. Although the service does not directly pay out claims, it relies on AI to significantly reduce the length of the overall process.

Using AI to enable faster claims and payouts is not without its challenges, however, as the technology is still in its earliest stages. Lemonade stated it can process a claim in just three seconds, but its AI-powered chatbot currently cannot process more complex issues. The company instead routes customers to human insurance agents for such matters.

Some providers are using the technology to do more than just enable chatbots and process simple claims. Health insurance firm Aetna has created AI software to help with claims payouts, for example, and it uses the solution to analyze lengthy healthcare contracts and simplify customers’ experiences. This also means employees no longer have to pore over such documents, freeing them up to handle more complex work.

AI and Its Expanding Role in Insurance

The insurance industry is not alone in using the technology for disbursements and other forms of innovation, although insurance companies are among the groups expected to spend the most on AI in the next five years. Healthcare providers are among the other groups predicted to invest more in the technology as time goes on.

AI’s role in payments and claims processes is poised to expand. Customers and businesses are now accustomed to speaking with, interacting with and receiving money through AI-powered tools and channels.

It is unclear just how the technology’s role in the ecosystem will evolve, but one thing is certain: Its impact on the insurance space will only grow as paper-based processes fade away.