The Potential Impacts of Artificial Intelligence on Auto Insurance
October 10, 2022
How is the Inclusion of Artificial Intelligence (AI) Software Going to Impact Auto Insurance?
What is AI? AI is short for artificial intelligence, and it refers to the intelligence that is demonstrated by machines, which is unlike the natural intelligence humans and animals possess. AI works in conjunction with ML, or machine learning, which is the ability of a computer or robot to gradually gain knowledge, used to perform tasks that are typically completed by humans.
Industries across the board have been adapting AI software and technology to expedite their various everyday processes. This includes retail businesses, technology businesses, and yes – insurance companies. Insurance companies are beginning to employ AI to advance the quote application process, how claims are handled, and answering customer inquiries – and that’s just the start.
AI isn’t just machines replacing humans. It’s a collaboration between artificial intelligence and human workers for increased efficiency and reduced human error. Presently, many industries are embracing the benefits of incorporating AI software. Insurance companies are following suit. Here’s how:
Artificial Intelligence stands to benefit both providers and policyholders.
Artificial intelligence spells good news for both providers and policyholders. From the provider’s point of view, AI can save us money by replacing the money we’d spend completing simple tasks that could be easily handed off to AI software. AI can man chat boxes and answer frequently asked questions using basic data. It can detect insurance fraud that would otherwise go undetected by the human eye, and more.
For policyholders, AI helps expedite processes that would otherwise take a long time due to the difficult, complex chain of middlemen that are involved in the claims process. Future advances might enable AI software to handle basic claims. Then humans could spend most of their efforts on more complex claims that require human discernment and intelligence.
AI can encourage better customer-relationship management as well, improving response time for basic issues, fetching, and reviewing policy documents quicker. All-in-all, this spells out benefits for both sides! As AI continues to advance, we can only expect that there will be further improvements.
How will industries need to adapt to keep up?
Before we launch into the various benefits that AI will have for the auto insurance industry, it’s important to look at the ways that industries (particularly the auto insurance industry) will need to adapt to keep up with the trends and stay competitive.
The transition to adopting Artificial Intelligence in the insurance industry is likely not to be a smooth, effortless journey. There will need to be retraining. The workforce will need to move away from loading up most of their days with small, easy tasks and move on to handling more complex jobs that require deeper thought. For insurance brokerages, professionals will need to be asking themselves how the involvement of AI will benefit their business, how they’ll handle this transformation, and what processes would benefit from being automated.
AI isn’t free, but it’s not outlandishly expensive, either. The overall money saved in improved efficiency and greater retention will likely pay off upfront and maintenance costs. Insurers may even better their bottom line by allowing AI to price their policies and personalize them more competitively. AI can use geographical location tracking for auto policyholders to price appropriately, as an example.
Some consumers would still prefer a human touch. That’s fine! Chatbots can speed up tasks and handle the consumers who don’t care either way. This will leave the staff to handle more complex queries from those who would prefer to chat with a human.
The benefits of Artificial Intelligence for auto insurance
Now, what about the benefits? For policyholders and providers, AI stands to benefit both sides in the following ways:
Increased efficiency as AI assumes repetitive tasks and frees up human employees to focus on higher-thinking jobs.
AI-powered chatbots filter out the most asked inquiries and transactions, freeing up time for human employees to handle more complex issues.
AI software uses machine learning to identify fraud that might go undetected by the human eye.
AI is an inexpensive option for insurance companies to streamline their application processes, and even streamline more basic claim resolutions.
AI improves customer experience by significantly reducing wait times and providing consistent advice based on data metrics.
These are just a few samples of some of the great benefits that AI has in store for the insurance industry, as well as a whole host of other businesses.
Many workers hesitate on the front of incorporating AI because they worry that automation will replace them. That’s not true. The incorporation of AI stands to benefit everyone by streamlining simpler processes and freeing up our time to focus on bigger, more pressing tasks. This allows for a more productive workspace, with AI focusing on repetitive tasks. Also, a more rewarding career for many workers since we no longer must worry about filling our days with things that can be easier passed off to AI software and tech.
As for the auto insurance industry, AI seems to be the way forward. From a customer perspective and from a provider perspective, AI has many benefits. There’s really no telling how advanced, future AI could amplify the industry or how its involvement could ultimately change the world.