Having an engineering background, I am programmed to build my list of things to do and check them off when done. Maybe that is the nerd in me, but it is satisfying to see what I accomplished during a given period of time. Even when given a project (as opposed to a task), I like to start and complete projects. I often struggle in learning how to take an idea and bring it to life. While I understand at a high-level what cryptocurrency is, I really struggle with how blockchain can be used in life to better ourselves. If I can’t explain it easily to you, I don’t understand it, and it will take a lot more education for me to understand it.
That leads me to another idea that I initially struggled with learning, and that is Artificial Intelligence (AI). AI is nothing more than having a computer think and behave like a human. Being a left-brain person, I initially wanted to know what the rules are for having a computer think and behave like people. When I learned that there were no rules, I felt my eyes roll back into my head and I shrugged. Remember, I like process, rules, and structure, and things get fuzzy for me without them. I needed some practical use cases that I could understand, so I went searching.
Common Ways Artificial Intelligence (AI) is Being Used Today
I quickly learned that a lot of industries use AI. Here are some common ways you can see AI used.
- Netflix recommends programs to me based on my past preferences.
- Credit card companies detect fraud in real-time.
- Healthcare organizations can create customized care plans based on the patient’s condition and past treatments.
- Tesla’s autopilot feature
- Predicting the weather
- Salesforce uses it to predict which sales pipeline opportunities are most likely to close and which leads have a higher propensity to purchase.
While I am not a gambler, I find it fascinating how the spreads/lines on each NFL game are extremely accurate. In my spare time, I am going to build a model (once I prepare the data) to understand what are the main factors that help a team cover the spread. The main factors could be the opponent, home vs. away, underdog vs. favorite, month, or spread amount. For example, I want to know what percentage of the time the visiting team covers the spread when they are the underdog by 3.5 points. Without AI, this would be very hard to do.
Ways the Insurance Industry is Leveraging Artificial Intelligence (AI)
When we think about the insurance industry, there are many ways it can use AI. Let’s start with claims processing and the massive cost of having claims personnel. With this significant cost, insurance companies factor this into how they price policies. If AI was used, companies could automate many of the manual processes around claims management. For example, if a policyholder was able to provide pictures of the damage to their car, AI could analyze those pictures and estimate the repair costs much quicker than their competitor.
With AI, insurance companies can price their products more competitively and be able to provide customized pricing. When you take the attributes of a vehicle driver, what are the criteria that greatly influence how to price the policy? Miles driven per year and drivers’ age are a couple of the major items that are used (among many others) in pricing policies. Does the color of the car, miles the car has already been driven, when the car is driven (morning, afternoon, evening), or ratio of cars to available drivers in the house have an impact on whether claims will be made? Only by leveraging an AI tool can you understand the variables that will have an impact.
Also, how can we leverage IoT (Internet of Things) to feed data back to the insurance company to better price the policy? Knowing where the majority of the accidents in a city happen during rush hour and knowing what highways and streets the car is driven during that timeframe, insurance companies can also leverage these data points to price a policy.
Let’s not forget about insurance fraud, as this is a huge cost to the industry. AI can analyze large volumes of data to find abnormal data that could minimize claims paid out. AI can also help to identify incorrect information that might be provided to them by the prospect in hopes that the prospect receives better pricing.
Many policyholders want an easy way to engage with their broker or carrier. The days of dialing a phone and having a human pick up immediately are over, and no one wants to wait in a queue until they can talk to someone. This has made “intelligent call center agents” and the web very convenient solutions to support policyholders.
Imagine if you could call your insurance company and work with an agent that sounds and thinks like a person. If this “intelligent agent” knew you had a car insurance policy and lived in a zip code that was recently hit by a hurricane, it would be able to address you proactively and streamline the entire process. By leveraging the web, what if you could interact with a chatbot that could provide the same level of service as the intelligent agent? Companies today are using bots to manage the entire claims process without involving a human being.
Insurance Has Only Scratched the Surface of AI
As you can see, there are many ways in which Artificial Intelligence can be used, and the insurance industry has just touched the surface of it. As Aristotle said, “The more you know, the more you realize you don’t know.” That is how I feel about AI. Until we start to implement it, we don’t know how it can and will be used. For us “left-brain people,” implementing AI certainly is not a project but a program that will go on forever. We all need to enjoy the ride as AI is here, and it is not going away.
Ready to start your AI journey? Contact Sikich today!