Claims can quickly add up for any sized P&C insurer. Claims adjusters are pressed to improve customer satisfaction while also cutting costs, calling for technology to allow greater efficiency.
Artificial Intelligence (AI) can help insurance companies process complex claim data for solving common bottlenecks. Juniper Research has estimated AI will drive up to $2.3 billion in cost savings by 2024 for the insurance industry.
Challenges with Unstructured Big Data
One of the biggest dilemmas for insurance companies invested in Big Data is what to do with unstructured data.
Unlike structured data, unstructured data does not fit neatly into rows and columns with a company’s existing data. This data may pertain to:
- Sensor Data
- Written Text
Unstructured data can take a great deal of time for a person to sort through. Instead, insurance companies invested in AI have the capability to better process this information.
Machine Learning is one application of AI that allows the solution to self-teach, becoming more accurate and efficient as more information is processed. This opens the door to accelerated cost savings over time.
How Machine Learning Impacts Claims Management
It’s essential to act quickly on newly submitted claims. One survey by Accenture found 95% of policyholders rated speed of settlement as their top factor for satisfaction. Both the policyholder and the insurer are relieved of further time and resources towards a claim.
In 2016, one insurer, Lemonade, announced an AI solution capable of paying out a claim in just 3 seconds. Settling a claim has historically taken days to complete and shows enormous room for opportunity.
Insurance carriers typically have a balanced scorecard for measuring the performance of claims management, including claim count information, average time to close, customer satisfaction and more. AI solutions take on bottlenecks in the claims management process, allowing smarter, more informed decisions for the business.
Analyzing a single claim requires expert attention. When a home or car experiences damage, it’s up to the insurer to review this damage and determine the cost to repair or replace.
One Japan-based insurer, Tokio Marine, uses an AI solution for processing images from auto claims and refers to this technology as “computer vision.” The AI solution, created by Tractable, has processed over $1 billion in auto claims around the world.
AI technology has recently experienced breakthroughs in understanding natural language. These breakthroughs can be observed in Google’s search algorithm, delivering precise search results in all languages.
When applied to insurance claims, AI can not only process the meaning behind text documents, but can also be trained using Machine Learning to understand written text. This text is an example of unstructured data that requires review before loading into the insurer’s P&C insurance solution, saving time when processed by AI. Text recognition can be used to process police reports, insurance adjusters’ notes, emails with the policyholder and more.
Artificial Intelligence is taking hold in the insurance industry. When applied to claims management, the right technology can:
- Drastically shorten the time to settle claims
- Save insurer significant man hours
- Improve customer satisfaction
- Reach faster payout
Reach out to WaterStreet Company today to request a consultation and demo.