It should not come as a surprise that insurers are remaining somewhat cautious about adopting AI for customer-facing activities, especially given the lack of regulatory clarity.
However, the opportunities to use AI technology to differentiate the value proposition and enrich customer experiences cannot be overlooked, according to EY.
The company states that in the future, more ambitious applications will help “shrink the protection gap.”
A key example that EY provides is that data flows from satellites and other sensors will be able to create detailed models of key infrastructure and digital twins for communities to run ongoing simulations for stronger and more precise protections.
EY noted that there a number of high impact AI use cases in the insurance market, which are likely to include:
Actuarial and underwriting – which involves streamlining the ingestion and integration of data to free underwriters to focus on high-value work that leads to stronger risk selection and more profitable pricing.
Claims – this involves automating first-notification-of-loss processes, as well as enhancing fraud detection efforts.
Information technology – which entails strengthening cybersecurity by analyzing operations data for attempted fraud, monitoring for external attacks and documenting such attacks for regulatory reporting.
Another key use case that EY highlights is marketing and customer service. This involves capturing customer feedback, as well as analyzing behavioral patterns and conducting sentiment analysis. As a result, this will tailor interactions with virtual sales and service representatives, and also help strengthen the credibility of chatbots and their ability to resolve complex issues.
EY states that AI “promises to deliver considerable benefits”, from increased operational effectiveness and reduced costs, to elevated customer experiences and greater predictive intelligence.
However, the firm warns, that the risks – both financial and otherwise – are just as important to remember and be aware of, just as much as the potential benefits that the technology brings.
“Consider the novel ability of GenAI to personalize product offerings and customer communications; with that high degree of customization comes greater risk of privacy, suitability and discrimination violations,” EY said.
