Five Reasons Commercial Insurance Carriers Should Invest in AI

Artificial Intelligence - May 23 2019

Under pressure to write more premiums, cut costs, gain operational efficiencies and deliver a better customer experience? The insurance industry like others is experiencing a change in customer expectations, competitive pressures, and market demands that are forcing rapid change. Disruption is happening on all fronts. With non-traditional insurers entering the market, traditional insurance carriers are being forced to change how they do business or succumb to business loss to new market entrants. Customers’ expectations for faster, and efficient service are at an all time high.

The Internet of Things (IoT) is affecting everyone as consumers and businesses are provided with a vast array of options, are better educated and well informed when it comes to selecting insurance products.

Swimming in pools of data, steeped in manual processes, risk-averse and challenged with having access to the right data at the right time, leaves commercial insurance carriers grappling for a life preserver.

Investing in AI powered solutions that enable them to reimagine age-old processes, accelerate response times, expand their underwriting capacity and increase customer satisfaction is one sure-fire way to improve productivity while tackling competitive pressures.

Discover five ways artificial intelligence delivers business value:

1. Data-driven Business Decisions

AI solutions using Natural Language Processing and Named Entity Recognition can extract, classify and interpret unstructured data like policies, applications, submissions, endorsements, loss run reports, statements of value, etc., hundreds of times faster than a human and with significantly greater accuracy. Enabling commercial insurance carriers to automatically free trapped knowledge from unstructured data sources gives underwriters access to more data for better risk assessment and pricing.

2. Expand Underwriting Capacity

In commercial lines, the underwriting process is chaotic and messy. Commercial lines carriers interact and conduct business with thousands of Brokers. On any given day, some of the world’s largest carriers are reviewing and triaging thousands of submissions manually. Employing skilled knowledge workers to manually read through email inboxes filled with submissions to identify the right submissions to quote based on the Carrier’s risk appetite, book of business and profitability. Many never make it through all of the submissions, many submissions are left unanswered and service levels are eroded.

Making matters worse, every broker has their own submission forms, email or format for requesting quotes. With no standardization, the time it takes to manually review all the submissions grows exponentially. Some may be handwritten, scanned documents, some are in email format, and some are digitally native. This lack of standardization makes triaging and routing  submissions time-consuming and labor-intensive with significant amounts of time spent on data entry and re-keying of data into back office systems.

With AI powered intelligent workflows designed for commercial insurance, carriers can automate and streamline the entire Submission Triage and Submission Prioritization process. By augmenting their human workforce with digital employees, routine, predictive underwriting tasks like data entry and rekeying data in rating engines and other back office systems can be eliminated. Even selecting and prioritizing the right submissions to quote can be automated, freeing up skilled knowledge workers to focus on assessing risk and writing the business rather than mundane administrative tasks. Underwriting capacity can be boosted by up to 50% and underwriting times can be shortened from weeks to days.

3. Improve Profitability

By digitally transforming processes, carriers can focus on the most profitable applications first. Investing in AI solutions that automate the intake of submissions, allows carriers to identify the application type and to focus on the right line of business first. By setting up rules to auto-decline and auto-route applications, carriers can respond and write business faster. Based on industry averages the first responder wins the business 56% of the time.

4. Attract New Talent

Investing in emerging technologies and innovation, helps carriers retain and attract top talent. According to Accenture Consulting, 68% of insurance employees expect intelligent technologies to create opportunities for their work.

As baby boomers retire, the next generation of insurance employees will be seeking out employers who are innovative, have embraced automation and offer meaningful strategic growth opportunities.

5. Deliver a Better Customer Experience

Customer expectations can vary, however, in today’s economy customer experience is a key competitive differentiator. Many companies differentiate purely on customer experience. Today’s customer demands a high level of engagement, they seek a high level of accuracy and responsiveness.

The internet has introduced new business paradigms. Customers demand a high level of engagement, they seek a high level of accuracy and instant gratification. Carriers are under scrutiny to take a customer first approach that includes a high degree of communication, higher levels of engagement, and faster response times.

Carriers who deploy AI-powered solutions to digitally transform how they conduct business will outperform carriers who keep their skilled knowledge workers buried in manual time-consuming processes. With AI, carriers can free up their talented knowledge workers to focus on critical thinking, complex reasoning, human intelligence, deepening customer relationships and offering bespoke services that best meet the needs of their customers.

Still not convinced? Download the "Are You Ready for Artificial Intelligence in Commercial Insurance" Checklist to assess your readiness.

Get Your AI Readiness Checklist for Commercial Insurance

Browse different topics

Recent Posts