Explore the evolving role of AI in the insurance industry

Five Sigma unveils insurance industry’s first AI-powered Insurance Adjustment Agent

Hackers are now specifically targeting insurance agencies with the first, coordinated national cyberattacks this past March. At Netguru we specialize in designing, building, shipping and scaling beautiful, usable products with blazing-fast efficiency. According to McKinsey, by 2030, the number of employees needed to conduct underwriting will be reduced by percent compared to 2018. IBM watsonx™ AI and data platform, along with its suite of AI assistants, is designed to help scale and accelerate the impact of AI using trusted data throughout the business.

Two-factor authentication is not perfect and is not always implemented correctly by businesses. Wetzel told of one insured business that used two-factor log-ins religiously – but only for certain transactions. The company’s insurer denied a cyber attack claim because the safeguard was not fully utilized. With the amount of data available today, and the number of ways information can quickly be disseminated through different medium, a good insurance partner knows that companies must be the single source of truth for their stakeholders. From our view, what matters is the culture of that company when responding to change.

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However, the insurance companies that raised rates have not yet made similar promises. Building trust with customers requires transparency about what data goes into training algorithms. When companies acknowledge this, customers can make better decisions — not only for insurance purposes, but also for road safety.

In the past two months, two interim legislative committees held hearings on the use of AI in government. Some legislators appeared wary of the technology, particularly about it becoming too powerful, as well as who would be liable in the event of malfunctioning technology. Four years after the pandemic overwhelmed Nevada’s unemployment insurance system, the state’s employment agency still has more than 10,000 outstanding appeals, and about 1,500 of them are from during the pandemic. According to the most recent employment numbers (2019), the company employs approximately 58,000 people. Financial Services Cloud allows Miller to manage pipelines, collaborate across deal teams, use internal and third-party data, and make sure information is being sent to the right people. Salesforce believes that the combination of Einstein AI and Financial Service Cloud will ‘transform’ Miller’s broker experience.

Quotech transforms the insurance landscape with AI-based risk analysis and price optimization solutions. The platform simplifies the online application process, offering automated claims management tools coupled with personalized customer service. Serving a diverse clientele, Quotech collaborates with insurance brokers, companies, and agencies of all sizes to enhance their operations. While current machine learning technology allows for improved decisioning on simple products like auto and home insurance, more complex underwriting processes like commercial and life insurance remain challenging.

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State Farm Ventures, launched in 2018 with $100 million in venture capital, appears to invest in tech-driven startups, including those that are AI-focused. Its main lines of business include property and casualty insurance, as well as auto insurance. Register for the webinar and discover how Slack’s AI-powered solutions can transform your organization’s operations and customer interactions. Another panellist, Gordon Wintrob (pictured below), co-founder of Newfront Insurance, will share his brokerage’s experience using Slack to streamline operations and communication channels to build trust with clients. Salesforce believes these tools will help to build productivity and efficiency within Miller’s business and provide an excellent service for clients. The traditional insurance agent, reliant mainly on personal appeal and interpersonal skills, is becoming less common.

Wearables and telematic devices collect and send data about customers’ lifestyles or driving habits. The data is used to train neural networks to predict chatbot for insurance agents the probability of an accident. Customers opt-in for this program to earn a substantial premium discount, while insurers can estimate risk better.

Under DETR’s current processes, an employee would review the hearing and issue a written report based on state policies. This process takes an average of three hours to complete, while the AI technology can issue a ruling within five minutes, said Carl Stanfield, DETR’s information technology administrator. It is difficult to tell precisely the fiscal damage to State Farm’s bottom line from the poor publicity, not to mention the clear evidence that their fraud detection systems are not functioning in unity with the company’s core business goals.

Additionally, market conditions have caused many carriers to take their own actions with networks to improve book profitability. “Networks that have quality control with membership recruiting and managing profitability of books have fared well. But AI is promising to be the next efficient and a highly effective way to turn data into products, insights and capabilities, he said. “Whether that’s at a point of renewal or it’s at the point of cross-sell and upsell, or account rounding, or what have you, AI offers the promise of doing things in new and exciting ways,” he said. AI innovation is ideal for the P/C industry, he added, because there is so much data available for AI to build from, he adds. “AI learns off very large data sets and spots patterns to create insights and recommendations and presents new content generated from studying that data,” he said.

Liberty Mutual Insurance earnings climb

Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; a16z has not reviewed such advertisements and does not endorse any advertising content contained therein. A recent study by OpenAI and the University of Pennsylvania found that with access to an LLM, about 15% of all worker tasks in the U.S. could be completed significantly faster at the same level of quality. When incorporating software and tooling built on top of LLMs (i.e., Vertical SaaS), this share increases to between 47% and 56% of all tasks.

Effective communication goes a long way in clearly understanding an insured’s business and future potential. This allows for sustainable partners to develop coverage that fits and to work closely with their Claims team to understand the partnership in context. For insurance partners, analyzing and aligning with their clients’ culture helps to solidify partnerships, as well as open the lines of communication and understanding. Over time, by identifying possible errors, through machine learning it suggests corrections, while the platform’s AI also enables it to produce a list of additional factors to be checked, based on its ongoing analysis of policy documents.

Agents locate information on claims, policy terms, driver details, and more, ensuring responses are accurate and contextually aware. A16z Partner Marc Andrusko on ModernFi’s takeaways from the FDIC’s overview of the deposit insurance system and potential options for deposit insurance reform. In Canada, Koïos is joined by startups like Birdseye, which uses AI to automatically generate step-by-step marketing plans; as well as Hippoc, which combines AI with neuroscience to help digital marketers estimate the success of their campaigns before they go live. Sewell, the director of the state employment agency, admitted that he was hesitant at first to use AI for unemployment appeals processing, a discussion that originated last summer. The feature allows users to ask questions related to anything from scheduling appointments to registering vehicles, and the bot can provide answers or connect users to webpages on the topic. The virtual agent is particularly helpful in assisting callers outside of business hours, Cook said.

Recent developments in AI present the financial services industry with many opportunities for disruption. Based on these insights, insurance carriers argue, they can price customers more accurately and fairly, focusing on their unique risk profiles rather than demographic factors. However, the practice has also led to pushback from drivers concerned about their data privacy. AI is used across the insurance industry for tasks like underwriting, risk quantification and fraud detection.

• However, the report warns of new risks emerging with the use of this nascent technology, such as hallucination, data provenance, misinformation, toxicity, and intellectual property ownership.
• The technology can support all business functions including marketing, quoting, claims and renewals.
• Markel has taken a step-by-step approach to AI, learning as we go on and dropping ideas where they don’t enhance what we do in a safe and compliant way.
• So, even if Visa can pull off the execution of this, I wouldn’t expect broad consumer adoption of Visa+ immediately, but it’s one to watch and see.

It’s also crucial to make AI work for your colleagues so they can work more effectively for your customers. Smaller organisations are able to benefit greatly by becoming more competitive with larger firms thanks to practical innovations of this kind. Initial excitement about pilot projects often dampens when faced with the reality of the lengthy infrastructure and data projects required for full implementation. Insurers are finding success in small, targeted areas within their organisations, and this may well be a sensible approach for brokers too. In 2024, generally, there is much more considered approach to GenAI than in the peak hype days of late-2023.

“This will be a revolutionary sales assistant because it can help agents connect with clients and complete sales,” Ko said. That doesn’t temper their competitiveness, but it does mean that the more agents use PortfoPlus’s ChatGPT plug-in, the better job it does for all of them. The nature of GPT artificial intelligence, however, has the potential to change the incentives to become more customer-friendly. Wong has worked both as a salesperson at an insurance broker as well as an engineer at IBM, after studying computer science at Hong Kong University.

Making their job even harder, due to remote working enforced by the COVID-19 crisis, customer service representatives (CSRs), who carry out the work, may not have access to the necessary documentation needed to properly fact-check policies. It’s the broker’s job to check the policy thoroughly for such errors and correct them, comparing them against other policy source documents including the application, quotation and any endorsements. But with policy documents often running to hundreds or even thousands of pages of dense legal language, this is an extremely complex, time-consuming and costly task. For decades, insurance policies have had to be manually checked by brokers before issuing them to their client. The hard insurance market has forced an uptick in remarketing of accounts, at very high volumes, during the last few years. This has been a significant driver in technology innovation and adoption, Taylor Rhodes, CEO of Applied, told Insurance Journal.

All this means that the agency of the future will be very different compared to agencies today. Predictive analytics and chatbots now enable self-service insurance shopping, especially for straightforward products like term life insurance and even personal lines, which are challenging agents’ roles. Quote Assist™ solves for this by empowering agents to quickly and easily facilitate quote generations that are sent directly to consumers, allowing them the opportunity to interact with agents while still managing their own digital transaction.

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Whether it’s upgrading the electrical or installing a new HVAC, I try to make sure my home is safe. Its algorithm didn’t detect an issue with the foundation or a concern with a leaky pipe. Instead, as my broker revealed, the ominous threat that canceled my insurance was nothing more than moss. The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates.

Slated to be generally available in February 2025, the Financial Services Cloud (FSC) for Insurance Brokerages uses a combination of CRM, AI, and real-time data to enable insurance brokerages to boost efficiency. ApplePay, NFC-based cards, and other successful examples all took more than 10 years to gain widespread adoption. So, even if Visa can pull off the execution of this, I wouldn’t expect broad consumer adoption of Visa+ immediately, but it’s one to watch and see. Interoperability is also a theme that will emerge given the proliferation of consumer (and also B2B) payment options at checkout across wallets, BNPL, pay by bank, and more. Additionally, if these third-party payment links allow developers to bypass Apple’s 30% take rate, developers could potentially deliver more value back to customers and drive greater loyalty. Also unclear is how to draw the line between an engaging conversation that tees up an agent recommendation – and actual financial advice.

Here are some specific ways insurance providers are incorporating AI into their workflows. Parametric insurance, which can pay a set amount when certain parameters, such as windspeed or flood levels, are reached, will soon be one of the fastest-growing areas that carriers embrace, thanks to the vast reach of artificial intelligence. AI can quickly analyze so much more data to accurately determine risk on a property or business, he said. Insureds will come to like parametric because payouts can be much faster, which can allow property owners to make repairs sooner and prevent further damage. Digital Insurance reached out via email to insurance agents and agencies to figure out what AI tools they’re using.

But with ChatGPT integrations, small companies can create unique products if they have niche but relevant data – in this case, PortfoPlus’s 4,000-odd agent users, whose activity on the app improves the GPT’s self-learning. And if they self-learn within a startup’s ChatGPT app, the users within that app mutually benefit. However, there are signs that – while State Farm’s AI-enhanced insurance fraud systems have been in place for at least the last two years – they do not function in a way that supports State Farm’s mission.

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According to Keven Curtiss (pictured top, left), head of Slack’s insurance business and host of the upcoming webinar, one key advantage that Slack offers is eliminating administrative burdens and allowing employees to focus on critical duties. To find out more about Einstein Copilot, CX Today recently created a guide to help you understand more about what it is and how it can help businesses. “We chose Salesforce as our digital partner because its generative AI tools are grounded in trust.

It’s worth having formal, regular, meetings to discuss tech – how it is currently working in your business and what other ideas could be considered. If you identify a problem that can be solved by AI and it benefits the customer by freeing up capacity then that’s a positive way to use the technology. Insurance agents are interested in artificial intelligence but skeptical, according to Liberty Mutual and Safeco, which released findings from a new report.

The insurance buying process has become significantly quicker and more automated. AI now plays a key role in assessing risk profiles based on individual behavior, allowing for near-instant policy issuance in areas like auto and life insurance. A Gartner survey among over 2,500 US customers showed that 38% of them would stop doing business with a company if they would find their efforts towards product or services personalization “creepy”, or in other words too intrusive, making them feel uncomfortable. Insurance companies offering such products need to bear in mind that hyper-personalization is more a communication than technological challenge. As Luca Russignan, EY global insurance knowledge leader, points out, when it comes to trends “storytelling is more important than data-driven approaches”. Startups and entrepreneurs of all sorts were pitching tools to help organize submission data and streamline customer service.

LLMs excel in meaning-mapping, translating data fields among sets at a fraction of the cost and time required for configuring ETL adapters. Linetsky believes this will help insurers create fully autonomous data pipelines to process vast, highly diverse data streams; extract actionable insights; and integrate those insights into marketing, underwriting and client experience workflows. AI can also help insurance carriers predict and quantify risks with greater accuracy. Suhas Sethi, global business leader of the insurance practice at professional services firm Genpact, explained that AI can reduce property-casualty insurers’ claims costs, which are rising due to inflation, supply chain issues and extreme weather events. My focus here is specifically on how the term “agent” is used in the contact centers, where it has unequivocally meant human agents – people who dealt directly with other humans, namely customers. The term AI agent has been gaining currency in other areas of the enterprise since 2023, but only now is it turning up in the CX narrative.

A supplier of objective information on business communications, BCStrategies is supported by an alliance of leading communication industry advisors, analysts, and consultants who have worked in the various segments of the dynamic business communications market. While not fully autonomous, these bots are performing many of the tasks that agents do (or doing things that help agents do them better), and being AI-driven, they are referred to now as AI agents. The pairing of these two words is new, and represents a shift in language, where AI is the paradigm that re-defines the meaning of words. Dr Björn Holste was Managing Director at Deutsche Bank and Prime Capital, Executive Director at UBS, and a previous Fintech founder in AI-based portfolio optimisation and quantitative risk evaluation. With multi-modal capabilities, MixtapeAI can connect with customers on chat, email, phone, social media, and more, ensuring smooth, consistent interactions at every touchpoint. Members will receive exclusive benefits such as access to product roadmaps, expert support, marketing resources, and co-selling opportunities.

As a result, it enables CSRs to be freed up to focus on improving their customer service and carrying out higher-level tasks. He said Vertafore “best-in-class agents” are using marketing tools like its Agency Zoom or Orange Partner or solutions like ClientCircle, Agency Revolution, Levitate, or Pathway to stay in touch digitally with their customers. Despite the past few years of hard market pricing, most agencies continue to grow both on the retention side and the new business side, says Doug Mohr, Vertafore’s vice president, industry relations and partnerships. “What’s really surprising is the volume of new business on personal lines,” he added.

IBM is among the few global companies that can bring together the range of capabilities needed to completely transform the way insurance is marketed, sold, underwritten, serviced and paid for. At the end of the day, “the tool allows them to write a better, more profitable book,” Hernandez said. “I think in the next five years, technology will become really important on the onboarding side for a broker or producer,” she continued. You can foun additiona information about ai customer service and artificial intelligence and NLP. Added to that, small and middle market business owners may not have a lot of knowledge about the insurance process, so they constantly have questions. Because its algorithms are designed to enable learning from data input, generative AI can produce original content, such as images, text and even music, that is sometimes indistinguishable from content created by people.

• A Gartner survey among over 2,500 US customers showed that 38% of them would stop doing business with a company if they would find their efforts towards product or services personalization “creepy”, or in other words too intrusive, making them feel uncomfortable.
• The final feature gives brokers a unified view of client property and policy details across multiple carriers, allowing for more personalized support.
• Generative AI has the power to transform the insurance sector by increasing operational effectiveness, opening up new innovation opportunities and deepening customer relationships.
• According to Salesforce, State Farm’s partner on this project, the insurer aimed to simplify its end-to-end customer experience across all customer contact channels – app, online and phone.

Of those who experienced a denied claim, 55% said they ended up paying more than they expected for treatment or services. With CRM being such a big adjacency to contact center vendors, the halo effect from Agentforce should be substantial, and will likely force these vendors to up their game with AI agents. The story is much bigger however, as Salesforce is just one of many large AI players and hyperscalers who see AI agents as their entry into the next wave of enterprise tech adoption.

AI may give companies a quick way to save some money, but when these systems use our data to make decisions about our lives, we’re the ones who bear the risk. Maddening as dealing with a human insurance agent is, it’s clear that AI and surveillance are not the right replacements. How did this make sense given what was ChatGPT App written on Travelers’ own website and patent applications? When Travelers boasts online that its workers “rely on algorithms and aerial imagery to identify a roof’s shape — typically a time-consuming process for customers — with close to 90% accuracy,” does that classification not count as the underwriting process?