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Impact of AI on the Future of Insurance

Ruchika Dhamija Expert Op-Eds June 30th, 2023

From self-driving cars to ChatGPT, Artificial Intelligence seems to be omnipresent. It makes machines intelligent and more functional. Even though many industries are embracing AI to automate their processes, the insurance sector is yet to warm up to it. However, with the arrival of InsurTechs AI is slowly becoming infused into the digital landscape of insurance companies.

Let’s first explore how AI is enhancing the way insurance products are experienced:

  • Fraud detection & prevention

  • Assessing risk

  • Streamlined claim processing

  • Enhanced customer experience

Post Covid the insurance industry has witnessed a seismic shift, which is to go from ‘detect and repair’ to ‘predict and prevent’. In the coming decade, AI’s technological impact will reach deep and would become even more immersive. Here’s how:

  1. Abundant data from connected devices

Existing connected devices (smartphones, watches, home assistants, cars, fitness trackers) will expand to include new categories such as eyewear, home appliances, medical devices and much more. Through AI this wide range of connected devices will lead to comprehensive data that will enable insurance companies to introduce new product categories, personalised pricing and a real-time customer journey.

  1. Advanced virtual reality

An extended virtual reality of sorts, it will take insurance inspections to the next level. During the inspection stage, an object doesn’t need to be physically present on the spot and the whole evaluation process would be done virtually with the help of AI, not to mention - faster. It would be easier for insurers to provide personalised quotes for the vehicle to be insured.

  1. Precise data ecosystems

Data becomes king. Data is quickly becoming the most valuable asset for any organisation. Vast data ecosystems will be created with open protocols to ensure accurate data is collected, shared and used across industries. It would be utilised by insurance companies to mitigate risks and detect fraudulent activity way before it happens.

  1. Advanced cognitive technologies

Right now cognitive technologies are primarily being used for visual and audio applications but that would soon change. In the coming future, these advanced cognitive technologies will consume and process incredibly large amounts of complex data that will connect ‘active’ insurance products to consumer behaviour. With this data, insurers would be able to predict and identify risks much better.

To cut it short, the upcoming shift will be huge and the impact seen by the insurance industry would be monumental - for both insurers and policyholders. It will forever change the way insurance is experienced.

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