Takeaways:
- AI technology takes damage information and produces repair estimates
- Development began as effort to automate claims processing
- Invention promises millions of dollars in savings for insurers
An AI model to detect property damage and evaluate images of the damage for insurance claims has received a U.S. patent.
The technology detects damage and produces an estimate for repairs, and incorporates historical data on repair costs for similar damages, particularly for vehicles, according to Arora. He is now an adjunct associate professor at Columbia University, specializing in applied risk analytics and AI, and worked on the technology while at Genpact in 2019 and 2020.
"The starting point is to use computer vision models to look at a few images that somebody could take from their phone and then send over to an insurance company, and the insurance company would have these models with them that would eliminate the need for a human to do that assessment," he said.
The inventors were thinking about how to automate claims processing using AI, especially with auto claims and homeowners claims caused by storm damage, Arora recalled. AI can square claims against a database of repair costs for different makes and models of cars. With property damage after hurricanes, AI can use images to detect the before and after conditions, and square the images of damage with the cost of repair material and labor to process claims.
"The fundamental development was computer vision, machine learning models and a lot of historical claims data. If you have these three things, you can go after any of these use cases," Arora said of the invention.
Applied to property damage assessments, such as hurricane damage, the patented technology can detect before and after conditions of roofs, according to Arora. Putting this information together with the extent of damage, type of roofing material, material costs and labor costs, the technology can produce comprehensive estimates, he explained.
The applications of AI in the invention address large inefficiencies in claims processing, according to Arora. "The operational cost to process one claim ran into hundreds of dollars. That was the biggest challenge that we were trying to solve," he said.
The inventors aimed to reduce the cost of processing a claim from hundreds of dollars to between $10 and $30. "When you multiply that with the number of claims that a company would process in a year, the cost savings could be hundreds of millions of dollars," Arora said.
