In business, you must always be adapting and progressing with technology. Businesses that fail to innovate are likely to get left behind by their competitors. 88% of the Fortune 500 companies that existed in 1955 are no longer in the Fortune 500.
The newest innovation in technology is AI (Artificial Intelligence). On the 30th of November, OpenAI, an artificial intelligence research firm founded by Elon Musk, released ChatGPT, a chatbot that allows the AI to answer questions in a chat-like interface and take context from previously asked questions to deliver relevant answers. Within a week ChatGPT surpassed 1 million users. For comparison, it took Facebook and Spotify 10 months to reach 1 million users. AI technology is moving extremely fast and businesses that can adapt AI into their processes will have a first movers’ advantage over their competitors. Here are 3 ways insurance firms can utilise AI.
- Chatbots and messaging services
Insurance firms can use AI to provide a more efficient and convenient service to their customers which can lead to increased satisfaction and loyalty. AI chatbots can be used to improve customer service and make it easier for customers to get the information they need. Chatbots can be used to answer common questions and provide information about insurance policies, premiums, and coverage. They can also be used to help customers find the right policy for their needs and aid with the process of filling out and submitting applications. Additionally, chatbots can be integrated with an insurance firm's website or social media platforms, making it easy for customers to access them from any device.
- Process and analyse large amounts of data
AI can help insurance firms to process and examine large amounts of data to improve their operations, gain insights, and make more informed and effective business decisions. AI algorithms can be used to analyse customer data, such as demographics, purchasing habits, and claims history, to identify trends and patterns. This can help insurance firms better understand their customers and their needs, and tailor their products and services accordingly. Additionally, insurance firms can use AI to analyse data from various sources, such as weather reports, traffic data, and economic indicators, to assess risk and make more accurate predictions about future events. This can help better manage exposure to risk and make more informed underwriting decisions.
- Automate manual and time-consuming tasks
AI may also help to reduce the amount of time and effort required to perform time-consuming tasks, and free up staff to focus on more complex and valuable client-facing activities. AI can be used to automate a range of tasks, including data entry, claims processing, and policy management. For example, insurance firms can use AI algorithms to automatically extract and classify data from a variety of sources, such as applications, claims forms, and other documents. This can help to reduce the amount of time and effort required to process and manage large volumes of data and make it easier for insurance firms to handle high volumes of business. Routine tasks, such as verifying customer information, calculating premiums, and issuing policy documents may also be automated.
As with any new processes, firms should be wary of any potential harm that could arise, particularly, for consumers in vulnerable circumstances. You can read more about the FCA’s consultation on AI in financial services in our previous article.