Technology moves at breakneck speed. And we now have more power in our pockets than we had in our homes in the 1990s
So What Is Machine Learning?
Machine Learning is a collection of methods whose purpose is to provide software with the ability to learn. It is a type of “deep learning” that allows machines to process information for themselves. On a very sophisticated level, allowing them to perform complex functions like facial recognition. It is a subdomain of artificial intelligence.
5 Ways Machine Learning is Changing Insurance
The insurance industry is always filled with data. We can no longer characterize the insurance industry as an idleness. When it comes to innovation and technology. Artificial intelligence (AI) and machine learning are transforming the insurance industry in a number of ways. They have always relied on data to calculate risk and come up with personalized ratings. Today, the sector is undergoing a digital transformation thanks to technologies. They are using machine learning to increase their operational efficiency, boost customer service, and even detect fraud. Here are 5 ways machine learning is transforming the insurance industry.
1. Fraud Detection
Avant-garde AI algorithm learns the data patterns of the company and helps in recognizing the fraudulent claims in the process. Having self-learning capabilities, the technology adopts the new unseen cases and accordingly improves the detection over time. Machine learning is an essential and integral part of AI technology. Which helps insurance companies in detecting frauds and identifying repair costs.
2. Underwriting
Data is now being mined from a variety of sources. Which can help insurers build a fuller picture of their customers? Machine learning algorithms can analyze this wealth of information quickly and accurately. Without being tainted by human bias, and help to offer more accurate prices. In health insurance, for example, data from wearable devices such as Fitbit can track a customer’s activity. While analysis of their social media may give a more accurate idea of somebody’s lifestyle choices than they are willing to share. This will likely punish those who are unhealthier than they say. But it will also reward those who live healthier lifestyles.
3. Targeted product recommendation
Insurance companies can leverage AI to give away the most relevant products for their customers. Given inputs such as gender, age, state, postal code, household size, the number of dependents and annual income. An AI platform can readily recommend term coverage and burial coverage in addition to general life insurance coverage. This could benefit the agents selling insurance. They can more intelligently map product variables, such as face and term value, to the specific needs of a customer.
4. Transaction and claims processing
As a highly regulated industry, the insurance industry processes thousands of claims and responds to thousands of customer queries. AI is being used to improve this process and move claims through the system from report to communicating with the customer. In some cases, these claims do not require any human interaction at all. Those companies that have already begun to automate portions of their claims. Process are realizing the time savings and increased quality.
5. Automation and process improvement
The insurance industry is regulated by specific legal requirements. It processes thousands of claims and responds to even more customer queries. Machine learning can improve this process and automatically move claims through the system. From the initial report to analysis and contact with the customer.
In some cases, these claims may not require the work of human employees at all. Allowing them to dedicate more time to more demanding claims. Insurance companies are already automating some parts of their claims process. Benefiting from significant time savings and increased quality of service.
