We are seeing the beginning of the next big disruption in the insurance industry. Companies that don’t embrace this are going to miss out on the most impactful change since the internet.
In the future, people will really engage with their insurance company, and I want to tell you why by describing ways in which Artificial Intelligence (AI) will impact insurance customer experiences and fraud.
I am Dave Preedy, a Digital Advisor in the UK. I am part of the Microsoft Digital Advisory Services group within Microsoft Services. Digital Advisors bring their expertise, as well as Microsoft’s resources, experience and innovation, to empower organizations to reach their digital aspirations. We partner to drive a program of change to build our customers’ digital business, and our website can be found here: Microsoft Digital Advisory Services.
Imagine a world where a customer is delighted to receive a phone call from an insurer. Compare that with today. While 70% of consumers say they are satisfied with their auto insurer, only 30% would actually recommend the insurer to friends or family. In this new world, AI-powered insurance companies will help customers avoid negative events such as car breakdowns, car leaks, crime patterns, or even serious health problems – in the first place.
Using the cloud and the Internet of Things, it is now possible to collect massive amounts of data from the real world. Using data from your car’s engine, your home’s heating system or insulation, or even from your own body, AI-powered insurance companies will apply the power of machine learning in the cloud to predict negative events, mitigate their impact, and potentially, avoid them completely. That is going to make customers want to engage. They will be delighted with new insurance customer experiences, and at the same time, it will also significantly reduce risk levels for the insurer.
Next, fraud. In 2014, insurers uncovered 130,000 fraudulent claims in the UK worth £1.32 billion. Studies show that fraud costs over £50 to every single UK insurance policy holder. Imagine the full burden of this to the insurance industry, and to consumers around the world.
AI is perfectly suited to detect fraud because it picks up on patterns that humans can’t easily perceive. For example, Microsoft is currently working with a large bank in Africa to reduce internet and mobile banking fraud. They are already enhancing detection rates, and reducing the false positives. In a similar way, AI-powered insurers would decrease insurance fraud.
One of the most promising innovations in Microsoft’s AI platform is the ability look at rich data previously excluded from fraud detection, such as photographs, video, and translated audio. For example, claims assessors at AI-powered insurance companies would have insights from video, photographs, and telemetry, which would allow them to better understand liability and the likely extent of damage. There are a few interesting articles on our progress here, which you can access at Microsoft’s The AI Blog.
Artificial Intelligence will augment the role of the skilled workforce to completely revolutionize insurance and many other industries. AI-powered insurance companies will provide insurance customer experiences that delight, while significantly reducing fraud to save money and time for everyone. How will AI impact you?