Data is everywhere. But it's not useful if you don't know what it means. For the insurance industry, AI is poised to shed some light. What is AI, exactly? "'Artificial intelligence' is a slippery term that can mean everything from personal assistants like Siri, to the natural language processing done by Google, to systems modeled on the human brain that can teach themselves new skills by processing large amounts of data," said Adrianne Jeffries at The Outline.
In insurance, AI refers to a newfound capacity to collect and interpret unstructured data (like images, contracts and reports) and to intelligent automation, in which insurers slowly migrate from rule-based decision-making systems to statistical learning and, eventually, machine learning, according to Francesco Corea, a complexity scientist and AI technologist.
While the first few steps toward AI "don't sound much different from a typical computer program," as Jeffries put it, "market researchers expect to see AI creeping into customer service and higher-level aspects of insurance." More telling, Price Waterhouse Cooper predicted last year that AI will have a "profound" impact in identifying, assessing, and underwriting emerging risks.
The change starts with process improvements and simple efficiencies. But make no mistake. AI has the potential to flip some tables, industry-wide.
The model, before AI
Insurance has always been data-focused, and a lack of data has never been the problem. "Especially in the insurance industry, data is available in abundance," said Babak Ahmadi, CEO of an insurtech AI firm.
"Patterns in the data, however, escape the attention of the human eye," Ahmadi said, when they're not obvious, when the volume of data is too much for a human mind to process, or when – as is often the case – the data is unstructured, or only semi-structured (e.g. images, reports and contracts).
As a result, even while insurers have focused on gathering more and better data, the business itself has remained largely intact. That, Corea said, is what could be about to change.
A quick tour of the future
How is AI set to disrupt insurance? It has to do with which direction insurers are looking: forward or back.
"Analytics and Business Intelligence (BI) applications use historical and current data about the business at hand and help to make the right decisions in an informed manner," Ahmadi said. They focus on what happened, looking to the past for insight.
Meanwhile, AI techniques look forward, to the future. “Given the historical and current data, what can we uncover in the data?” Ahmadi said. “What can we predict for future developments? What can we optimize? What can be automated?”
The FedNat Insured Web is a great tool for our insureds!
They like having a centralized location to view policy info, make payments, upload policy documents, and elect to become paperless to receive a discount.
The insureds also can file a First Notice of Loss for a claim and access exiting claim info. Silvervine recently enhanced the site which allows insureds to upload policy documents directly to their policy. The uploaded docs go directly into our workflows and save a lot of manual effort on our part.
From my visits with agents, the agents appreciate the app for the amount of time saved on having to download and attach photos directly to the policy.
The app can also reduce the amount of staff required for a busy office to fulfill underwriting requests for photos.
When training agents they are amazed at how quickly the photos attach directly to the policy. After taking photos using the app and before they make it back to their desk, the photo is already attached to the policy. They also like the ability to attach additional photos for pre-existing damage.
Customer Service is seeing an improvement with retention as the text message definitely triggers phone calls from insureds to make payments.
The insureds love the fact that we notify them on their phones because they state that sometimes they don’t receive their mail for various reasons.
The insureds are paying more attention to the texts then to their actual mail. We try to set all of our customers up on that option if we notice that they are not currently enrolled, as it builds great customer relations as well as retention.
As a company we have adopted the use of Policy Scan for all our policies, and our agents have adopted the use of the app as well.
Not only is it easy to use, there is also no more worrying about losing photos, having to store photos or photos being attached to the wrong policy.
With Policy Scan we have increased efficiency in our workflow and reduced our exposure on the risk.
Silvervine’s core administration solutions easily handles multiple carriers within multiple states, including accounting, payment processing, immediate policy issuance and endorsements.
What started out writing one product, one line in one state has now grown into mulitple products, multiple lines and writing in multiple states. We have over $95 million in annualized premium in-force and we expect to grow by 20% during the next year all serviced by Silvervine.
Silvervine was our insurance software system of choice when we started the company in 2006. Silvervine enabled us to begin business within a few months of licensing the company. Today, we are one of the top 20 homeowner’s writers in Texas and SIlvervine’s solutions have been an integral part of our success.