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INSURTECH

AI as a synonym for trust

21 June 2021 · By Asier Lozano

It’s no secret that the insurance industry has an issue with trust. Policyholders tend to have little faith in their insurers due to poor public opinion, while insurers have had their trust eroded by the rising number of fraudulent claims

This has caused a damaging cycle of distrust in a sector that should be built on reliable relationships. How do we break this cycle? Technology — and AI in particular — may just hold the key.

AI and insurance — reassuring and reliable

You could say that insurance providers are stuck between a rock and a hard place.

From a customer service perspective, it simply doesn’t work to treat the policyholder as guilty until proven innocent. When a customer submits a claim, we have to show empathy and understanding — not distrust and doubt.

That said, catching fraudsters is of crucial importance too. After all, insurance fraud costs companies dearly each year and only serves to increase the costs of premiums for other, honest policyholders.

The good news is, technological advancements have made it far easier to separate valid claims from fraudulent ones. Policyholders can now provide accurate evidence using affordable CCTV, dash cams and high quality camera phones in order to fortify their claim. And insurance providers can use AI technology to process their claim faster, with less risk of fraudulent claims being honored. 

In this way, AI could help rebuild trust between insurance providers and policyholders — reducing time and cost on both sides, making the insurance industry a positive space once again.

How AI is used in insurance today

Policyholders may initially be concerned that insurance technology will strip away the human, empathetic nature of claims handling and management. They could even worry that AI is simply another, next generation tool applied to deny their claims. 

These apprehensions are unfounded, though. Because integrating AI into the claims process will actually help honest policyholders get the best result from their claim. 

Let’s look at how AI technology like Bdeo is already changing the insurance industry for the better.

Real-time data makes personalized policies possible

Tracking devices and sensors are commonly found in industrial sectors. But as the technology both improves and goes more mainstream, we’re seeing new opportunities for bringing data-driven consumer goods and insurance together.

Smartphones, smart watches, fitness trackers, cars and even shoes can all be connected to WiFi and used to gather information 24/7 without interruption. This influx of connected devices has been dubbed the “Internet of Things” or “IoT” and experts estimate it could have a $11 trillion impact per year

However, while all this data is useful, the value will be missed if insurers can’t utilize it effectively. 

By gathering all this extra data, AI technology can start putting together personalized profiles for every policyholder based on their habits. Insurers can start offering services the customer may not have realized they needed, including reduced premiums for improved habits and discounted deals for device users.

Personalization is a huge selling point for potential customers. With AI doing the hard work for you, you can focus on growing and supporting your customer base — offering incredible customer service to build trust between the company and policyholder.

AI is giving customers a better insurance experience

If you crash your car, a water pipe explodes, or you lose your engagement ring… you want to be seen and heard by insurers. This isn’t only achieved by a friendly voice at the end of the phone, it can also be provided via a reassuringly seamless claims process and speeding the application through.

Conversational AI chatbots can do nearly everything a human customer service agent can do — and still provide that personal touch consumers crave. Better still, AI can perform the laborious analysis tasks faster than many human employees, to improve the customer experience. 

Bdeo’s visual intelligence systems, for example, can accurately assess the damages done to a vehicle or home. One of the most important questions all policyholders will have is: “Am I covered now that this has happened?”. AI can not only give quick, reassuring answers but can add trust and reliability to the claims process, from start to finish.

AI settles claims faster while decreasing fraud

Insurers and policyholders alike are looking for a quick, simple process when a claim is filed. 

The “time-to-settle” metric is what policyholders care about the most and the majority of honest claimants just want the process to be completed with as little time and effort as possible. 

Utilizing AI in the claim process can do just that.

Bdeo’s technology empowers policyholders to capture accurate and high-quality visual evidence via their smartphone or other device, and use it to back up their claims in seconds. Then — powered by AI — the damage is analyzed and assessed, with next steps automatically determined on a claim by claim basis. Now that’s speedy!

Better still, our AI is constantly learning from previous claims and user data, evolving to become even more accurate at recognizing a legitimate claim or flagging the claim as fraud.

Artificial and visual intelligence in insurance can build trust and combat fraud

In a What is the fraud triangle and why is it so important in insurance?, we wrote about the three conditions of insurance fraud: opportunity, incentive, and rationalization. AI can make insurance fraud less easy, less rewarding, and reframe a fraudster’s rationalizations, too. 

If what we’re aiming to do is rebuild trust, then AI is the way to go about it. With faster claims processing and more accurate payouts, honest customers will be satisfied — improving the insurer’s public reputation. Then, as more people grow to trust their insurers, fewer people will feel compelled to “get away” with fraud as a sign of rebellion. Altogether this results in a more cost-effective insurance industry, with fewer fraudulent payouts and reduced premiums passed back to the policyholders.

What we’ve just described here is a positive cycle of trust and honesty — a direct contrast to the cycle of distrust we’re in right now.

Bdeo can help you establish trust between your business and its customers. To learn more, visit our site and request a demo today.

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