Tractable
06.06.2022
3 min read
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Claiming a new world: How applied AI is transforming auto insurance
In the US there were over 12 million car accidents in 2019 alone.* And every time a car accident happens, drivers need to make an insurance claim.
Traditionally, the insurance claims process requires complex coordination between many different parties and features a range of difficult steps, each step prone to inefficiency, errors and delays.
On top of the stress of the accident itself, each party must provide detailed assessments for damage, salvage or repair. And to process the claim, insurers need access to client, policy and auto-repair data.
This all takes time. As a policyholder, you wait for someone to assess your damaged car, then wait again as the repairer and insurer agree on what exactly should happen to your car — and when this might happen (more waiting). It’s a time-consuming, repetitive and onerous series of tasks and stages.
How auto claims is changing
But, thanks to visual artificial intelligence (AI), the reality is that this scenario is rapidly becoming the old world of claims processing.
We are entering into a new world, where AI is being applied in practical ways to radically change and streamline the entire claims process.
Today, visual AI is able to expedite claims by allowing policyholders to scan damage to their car after an accident using their smartphone, which enables the AI to quickly interpret the visual data, recognize the damage, and systemize claim settlements. It enables insurers to process high-stress claims at higher volumes, saving valuable time, while also minimizing the costs to process each claim.
Applied AI systems, together with supporting hardware for data collection (such as geospatial data, high definition video, or IoT data sets) can also gather evidence to make appraisals faster and safer — while collecting verifiable data points in real time to provide a more complete picture of each claim.
In this way, AI-powered solutions give insurers much more visibility of each of its customer’s claims, offering new opportunities to improve services. For example, applied AI can flag border-line claims for further approval, ensuring that important cases get human attention and claims audits are easier to execute.
Moreover, fully-digitized workflows give insurers a new level of strategic insight. It enables its claims handlers to manage by exception, automatically reviewing and checking claim estimations for validation so identifying new efficiencies for long-term growth.
The pandemic push towards digitization
Traditionally cautious of change, the insurance sector is undergoing a rapid transformation as businesses embrace AI technologies. It’s a shift that’s been partly encouraged by the COVID-19 pandemic, which placed a greater dependence on digital technology and remote working across many service industries.
In fact, in the US, many state insurance supervisors encouraged and even demanded digital service delivery. For example, an emergency order issued by the Insurance Commissioner of West Virginia mandated insurers to use digital technologies for claim adjustments.
By collecting evidence remotely without dispatching insurance personnel to appraise damage, not only could insurers protect people from infection, they could also reduce mileage and indirectly reduce pollution and greenhouse gasses.
It’s an example of how AI transformation and digitization are indirectly supporting and driving more sustainable business practices.
Transforming business intelligence
Today’s applied AI tools can give senior leaders a level of strategic visibility and analytical insight previously thought impossible. In the world of auto insurance, new advantages are seized every day that use the potential of AI to rapidly and radically transform the way companies work and operate.
And not only is AI expediting claims processes and improving customer experiences, it is also indirectly reducing pollution and greenhouse gasses — revealing unique and important opportunities for many organizations.
By leveraging applied AI solutions, businesses can identify pivotal opportunities to increase their efficiency at a granular level. A company’s own data, combined with modern applied AI solutions, can help uncover new strategic initiatives and accelerated workflows.
Firms can also foster greater productivity by freeing up staff talent from tedious workloads. In particular, software solutions can allow employees to add value in other areas of business, like customer service and strategic innovation, to create a more resilient organization.
Applied AI tools can help firms revolutionize their operations and customer service, allowing them to adapt to today’s discerning consumer and shifting market.
What’s more, AI’s flexible learning capabilities allow the technology to quickly evolve, taking on new tasks, providing organizations with increased strategic agility, long-term value, new insights and opportunities.
And as we’ve seen, the same applied AI tools also have broad applications within the sustainability effort, helping the fight against climate change and extending their value beyond commercial benefits.
*Source: Statista.com