Top emerging techs for insurers: Predictive analytics, AI, chatbots
Insurers show interest in a diverse range of so-called "emerging" technologies, but certain innovations are farther along the deployment curve than others.
That's according to insurance tech analysis firm Novarica, which surveyed 116 members of its CIO Research Council for the report "New Research: Emerging Tech in Insurance - AI, Big Data, Chatbots, Drones, IoT, RPA and More."
"The most pilot activity is in digital and analytics areas like artificial intelligence, big data, sensors, drones, RPA, and chatbots," writes report author and Novarica president and CEO Matt Josefowicz. "Insurers are looking to these technologies to improve risk selection, claims, service, and operating efficiency."
P&C insurers, which comprised 82 of the respondents, are looking to emerging AI technologies like machine learning and unstructured data recognition mostly within underwriting and claims departments. On the life side, AI is mostly a customer service play. This trend is seen across technology categories, Josefowicz writes.
Within AI, there are several different subcategories that have different business value for insurers, according to Novarica:
- Machine learning focuses on computer pattern identification and analysis to refine of algorithms like underwriting or claims predictive models.
- Image recognition applications for insurance include property inspections or property loss damage assessments. AI image recognition can also include extracting structured information from unstructured documents.
- Voice recognition differs from interactive voice recognition (IVR) programs, which communicate based on a set of predefined triggers and automated rules. The new breed uses audio natural language processing, which turns human language into a data source to automate transactions or established sentiment analysis.
- Unstructured text can reveal identify patterns and correlations without designing models to test. It's the technology that underlies chatbots.
Insurers tend to focus on technologies that already have wide consumer adoption, Novarica notes. Categories that received comparably lower levels of attention included augmented and virtual reality, blockchain, smart home automation, and wearables.
"The growth of these capabilities should lead to improved risk selection, streamlined processes, and better business results for insurers in 2018 and beyond," Josefowicz writes. "But technology changes faster than culture and practice at most insurance companies—insurers that want to fully leverage the capabilities enabled by emerging technology should look at their products and processes in the light of new technical, market, and customer realities.