As artificial intelligence (AI) and machine learning technology continues to grow and expand within the industry, Patrick Greene, Vice President of Data at Munich Re Automation Solutions suggests that, eventually, AI must be “fully integrated” into the underwriting and claims process.
“Those that have invested in state-of-the-art underwriting rules engines are able to respond immediately and implement new underwriting standards in real-time to ensure that they apply either a fair premium, where the risk is increased, or an exclusion where the risk is unknown/undefinable”, saids Greene.
Looking into the longer term, Greene anticipates that nimbler firms will increasingly deploy augmented automated underwriting systems that use machine learning and AI technology to pre-assess applicants, to identify those who can be routed through a “lighter-touch underwriting process.”
Greene notes that by taking this approach, this will eliminate the need for face-to-face interactions such as nurse or doctor visits entirely.
When asked a question regarding what companies should be cautious about in regards to using AI technologies within insurance, Greene explained that while the technology is constantly evolving, the technology itself however, can only be as good as the people implementing it.
“If a company is not taking the proper precautions to ensure proper mitigations around potential bias and compliance with existing and potential future regulations while protecting user data, the entire system may as well be set back to employees handling the entire claims and underwriting operation.
“Customer perception of these technologies needs to be addressed from the outset as while consumers see AI as an advantage to their insurance needs, it should still be in a company’s best practice to explain why AI is being used, how the data is being sorted, and what effect it will have on the outcome for the customer. Being as transparent as possible when implementing innovative technologies in business makes the customer feel safer, which in turn allows them to trust the operation handling their information.”
Furthermore, Greene cites how people have always been at the heart of the underwriting process, and how adopting AI into this process reflects the sector’s desire to continue prioritising a customer-led approach, which ultimately now demands a quicker and more personalised service.
“Ultimately, the industry is using data to provide the end customer with an optimal user experience – whether using AI to move away from a dependence on paper forms, to streamline the application process, or to direct applicants through the most efficient path for them via machine learning capabilities.
“Whilst the industry is heading in the right direction, leaders must be cognisant that the future battlefield is in bias detection, explainable AI (XAI), and the ethical and regulated use of personal data. If these considerations are embedded into the transition now, insurtech has the potential to permanently transform the industry.”
