Over the last few years, artificial intelligence (AI) has rapidly transformed a number of industries. While sectors like insurance have long been traditionally analog spaces, they are now beginning to unlock AI's full potential. This is an exciting frontier, but also brings a sense of unease, especially for those who worry it could make human roles obsolete.
In my role as a chief technology officer, I've seen firsthand how AI is reshaping insurance, from claims processing to personalization, for agents, claim adjusters and customers. We're already seeing its benefits, and we believe those benefits will only grow. In 2024, the global AI insurance market size was estimated at $8 billion USD, and is anticipated to reach around
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AI's transformative benefits in insurance
Personalization and customer trust. Building customer trust with relevant offerings is at the core of what insurtech companies strive to achieve. AI supports advanced demand modeling and automated segmentation to identify the best candidates for tailored offerings. For example, offering personalized protection at checkout, specifically tailored to a traveler's trip, directly addresses individual risks and builds confidence.
Accelerating claims processing and empowering assessors. Traditionally, claims processing involved multiple status checks and manual interventions. AI and Optical Character Recognition (OCR) are pivotal in automating and streamlining these tasks. While OCR is an established technology, recent advancements in AI and Large Language Models (LLMs) have significantly enhanced its capabilities, allowing for more accurate data extraction and contextual understanding from diverse documents.
These technologies are able to automatically review policy language, extract information from submitted documents, assess claim validity, understand context and detect fraud. While AI-generated responses are largely accurate, human claim assessors remain essential for reviewing and approving final decisions, particularly for complex claims. There are many nuances in terms of how much AI can augment the claims process based on a specific industry and handling claims accurately and efficiently is crucial for reinforcing customer satisfaction.
AI acts as a tool that facilitates and expedites the claims process, saving claim adjusters significant time to focus on higher-value tasks. For example, our average claims resolution timeline is a median of three days, compared to an industry average of about 30 days. This also helps reduce manual claims processing costs, a win-win for both companies and customers.
As the regulatory landscape continues to evolve alongside AI capabilities, companies must foster a culture of customer-centric compliance, with a keen awareness of data privacy and consent issues. As organizations and governments work toward striking the right balance between implementation and regulation, we expect demand for roles in these areas to grow over the next several years.
Looking ahead
As AI technology in the insurance industry becomes more sophisticated, we'll see advanced chatbots, enhanced support throughout the policy lifecycle, better claims processing accuracy and faster customer service, all under human oversight. Human touch will still be paramount for ensuring accuracy and for solidifying consumer trust. As consumers continue to look for digital-first products and solutions, insurers and other partners must invest in upskilling and in creating teams that facilitate ongoing digital transformation. Insurance agents, claim assessors and AI technology will have to blend 'art and science,' serving as partners to deliver personalized, efficient protection at scale.
With the emergence of AI technology, insurers should embrace the opportunity to reskill talent to solve larger challenges. We must reimagine AI as a tool for empowering teams, enhancing customer experience and accelerating progress. As AI capabilities grow, they will further empower human insurance agents and claim assessors, allowing them to focus on a new arena of higher value tasks.
