Insurance industry yet to fully embrace AI benefit: Accenture

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Insurers are lagging other industries in making use of Artificial Intelligence (AI) to meet the expectations of modern customers and keep them happy, Accenture says.

Almost a third of claimants are not fully satisfied with their home and auto insurance claims-handling experience, a survey of the past two years of claims activity by Accenture has found, with speed of settlement topping the list of grievances.

Accenture calculates that unless AI is embraced to improve customer retention, $250 billion in premiums is at risk over the next five years across the insurance sector, creating winners and losers.

“That is the amount of money that is going to be moving around the industry. The implications to individual companies will of course vary,” Accenture MD of Applied Intelligence Raphael James tells insuranceNEWS.com.au.

“To modernise the technology will take a fair bit of investment and a fair bit of effort. The ideal approach is to design for a future that we know is going to be heavily AI orientated, but at the same time bite that elephant off in pieces – so design for the future and build out in stages.”

Insurers are “still way behind where we need to be” in data use, and in the years ahead, claims processing, broking and underwriting are all set to be transformed by AI.

Underwriting in particular clearly lends itself to the technology, being structured, data driven, rules orientated, and regulated.

AI can develop insights at scale that would take “enormous amounts of manual effort” for people to match, and can “surface those insights” from the large volume of data that is readily available, and drive decision making within processes like underwriting.

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“If I were to be provocative, I would actually say it should be entirely machine managed,” Mr James said. “It is not a subjective set of processes. Artificial intelligence should accelerate those processes and at a minimum augment the decision-making for the underwriter.”

The machine managed underwriting should “only flick through exceptions to humans for more of the industry specific, knowledge orientated elements that require further research,” he says.

“The amount of machine learning and AI decision-making capability that exists should make the underwriting process incredibly seamless and managed by machines.”

Accenture says the costs of implementing AI are falling dramatically and industries such as retail are leading the way.

“AI is no longer a technology of the future but an established presence in our everyday lives. Many insurance innovators are already putting it to work to deliver better customer experiences and empower their workforces in parts of their business,” it said.