How AI Can Influence Customers Finalise An Insurance Product

Imagine a scenario where an individual has a medical condition and is admitted in a hospital. As soon as he is admitted, he is told by the medical staff that he is covered under health insurance and that his treatment is cashless. Such a case would be called insurance claim utopia for the policyholder, especially when compared with the hassles of claiming medical insurance today.

But can this be achieved? 

Well, the answer is yes. An artificial engine using said individual’s historic data such as daily data, work activity data, and location among various others, can predict that the individual has been admitted to a hospital. It can then trigger a request to the hospital notifying them of the individual’s admission ensuring cashless treatment as she has been covered by health insurance. Such an implementation of AI would save time, negate the hassles of manually filing a claim and ensure that the policyholder receives the right treatment at the right time.

The insurance life cycle

The insurance life cycle primarily consists of four stages

1. Identifying the right product for an individual

Insurance transactions today, are primarily conducted by insurance advisors or agents who play a big role in helping insurance products reach the end customer. While this has proved successful, it is also one of the reasons why insurance has gained a bad name. Agents often fail to make customers understand insurance products and may engage in mis-selling to earn commissions. Customers end up getting the short end of the stick, which is not the best product to suit their needs.

Using technology to optimise the insurance life cycle

A sales driven approach to insurance while effective in the short-term, is not a sustainable way for agents or for insurance companies to grow. An insurance claim is made when the policy holder is in distress and the last thing a customer wants to hear is that their claim is being denied due to a clause in the policy they did not understand or had no idea about. The need of the hour then is a customer-centric view of insurance as a business. Inconsistencies and mis-selling can be avoided by making the process streamlined and standardised. 

Effectively using data points will not only identify the best-fit product for an individual but also explain the product in a language and in terms that she understands rather than using jargon, which only insurance or legal experts can comprehend. The insurance needs of every individual, the premium paying capacity and appetite may vary depending on thousands of factors in terms of today’s world data points. Analysing this data cannot be done manually by insurance companies or agents. This is where we need technological intervention, machines capable of processing these data points effectively. AI can play a pivotal role in making a streamlined insurance value chain.

Using AI to identify if claims are triggered at a certain stage

The biggest gap lies with understanding the stage at which a claim may be triggered with no system or individuals to assist the policyholder. It requires comprehending enormous micro data points belonging to an individual and mapping them to insurance coverages that he/she might have, to predict a possible claim scenario. A machine learning and artificial intelligence tool is required to work on these data points which, thanks to the widespread penetration of mobile Internet is now widely available and is able to identify and notify the customer and insurer of possible claim scenarios.

Streamlining the claims process

The claims process today, is broken, paper-driven and time-consuming. This proves to be one of the major reasons for low insurance penetration and low confidence in insurance especially in tier two and tier three cities in India. By using AI effectively to auto process claims, the speed of filing claims and claim settlement can exponentially increase. The vast data available on claims if digitized properly can effectively give a fabulous claims experience to the end user while significantly reducing costs for insurers. 

AI paving the way for insurance business

Artificial intelligence and machine learning can begin an industrial revolution of sorts for insurance. It can increase the overall efficiency with which insurance business is conducted, reducing cost, thus reducing the price the end customer must pay. AI and machine learning which may be viewed as a future implement must become the norm for the insurance industry. It has the potential to change the way in which insurance is perceived can help in self-propagating insurance reach, making it a viral phenomenon.

The writer is Co-Founder and Group CTO, Symbo Insurance