AI will help save insurers billions over next five years
Published: March 5, 2019
Updated: April 1, 2019
Author: Luke Jones
CATEGORY: Car Insurance
Insurers and brokers are often told that artificial intelligence (AI) will change the industry through automated tasks and machine learning solutions. Perhaps the biggest change will come in claims, where AI will be a “big time saver” for adjusters. So much so, one researcher believes companies will be able to save billions of dollars each year.
Auto insurance companies have already started adopting AI for recommendations on claims. For example, AI modelling is helping to determine whether damaged vehicles should receive repairs or be scrapped, says Nick Maynard, a senior analyst for Juniper Research.
“At the moment, a lot of these applications won’t be fully autonomous,” he said in an interview with Canadian Underwriter. “They will make a recommendation, and this will be analyzed by a trained appraiser or somebody at that insurer.”
Maynard is an expert on the expansion of AI in the insurance industry and wrote the AI in Fintech: Roboadvisors, Lending, Insurtech & Regtech 2019-2023 report. The study was published last month by England-based Juniper Research and shows worldwide insurance savings could reach US$1.3 billion by 2023 if AI is properly used. This year, the number of money AI is expected to save insurers is $300 million.
Maynard explains these savings are expected specifically in the property, auto, life, and health insurance sectors.
“A lot of computer analysis tools, for decades, have been able to produce a report when things meet certain criteria and that is a traditional rules-based system, but the AI system is learning to set those rules itself and understand when those rules are applied,” said Maynard.
“It will actually be a big-time saver,” Maynard said about the ability of AI to assess insurance claims. “The very nature of AI is the more it is exposed to the better it becomes at the task that it is being applied to. I think over time it will move into a fully autonomous role and you will see fully autonomous claims settlement.”