How is AI Impacting the Insurance Industry?
Six years ago, I had a minor accident with my car. Needless to say, it was not a pleasant experience. I had to take my car to a drive-in inspection centre, contest a false claim made by the other party and then finally get my car repaired. The whole ordeal took 3 weeks. This experience made me realize just how difficult and disjointed the current auto-insurance process is for a typical claimant.
Two years ago, when our team came together to apply AI in the industry for image analysis, we were approached by a large national insurance carrier to address their pain point of automated damage detection from damage vehicle images, to make claims processing more efficient. Based on how a damage on a vehicle looks, every expert makes their own judgement on the extent of damage and the types of damage due to a particular incident. Artificial intelligence is now so advanced that just with images of the damaged vehicle taken by the end-user, the type of damage visible and the extent of damage can be automatically detected and classified. We started working with one national US insurance carrier two years ago and now we are working with several insurance carriers across the globe.
Galaxy.AI’s mission is to make the auto-insurance claim filing, which is a stressful experience for the end-user, extremely easy and convenient, without the need for an in-person inspection of the vehicle by an expert or the claim appraiser. We work with automotive insurance carriers to provide their consumers with an AI solution to make their first notice of loss (FNOL) intuitive, convenient and claims estimation efficient while reducing their Loss Adjustment Expenses (LAE).
Our team has trained the algorithms on specific image and text data of motor claims from our customers, but also generated our own proprietary dataset for the training and further improvement of the algorithms. After speaking with several insurance carriers, we have realized that every insurance carrier wants to change in their current appraisal process, as its expensive and inefficient, in addition to improving their claimant customer satisfaction.
However, we are not the only ones that have seen the benefits, this type of technology, can bring insurance carriers and their consumers. Insurtech benefits all facets and lifecycles of an insurance product, from smart quoting, underwriting, policy issuance, first notice of loss (FNOL) and claim estimation. For example, when an end-user gets a quote for their policy, AI enables quotes to be given faster and with less information needed from the end-user. The sooner the quote is given, the sooner the user is able to get the policy.
For underwriting, visual AI with deep learning and computer vision, is able to skip the in-person property inspection, for example, and get property characteristics, existing damage or wear and tear, and underwrite policies with images obtained through end-user’s cell phone. Property damage assessment is one area where AI’s need is more imminent because it's not only unsafe to do roof inspections, but also very expensive and time consuming, so through using drones or satellites, the roof is assessed automatically through AI.
Similarly for FNOL and claim estimation, when the claimant has an accident it is a stressful incident to begin with and in that time if you ask the end-user to spend several hours on the phone relaying the accident information, it is not only cumbersome but also a lot of information can be lost in “translation”. In addition, AI eliminates the need to inspect the vehicle in-person through a claim appraiser and enables remote claim estimation through images taken from the cell-phone by the claimant. The AI has benefits to return analysis in a few seconds versus an hour taken by a claim appraiser, to give the initial estimate.
Fraud detection is another important area where AI helps insurance carriers to identify anomalies in claim incidents and prior to issuing policies. In addition, there are new types of fraud cases that have now been identified with the technological improvements, which has been possible through data analytics and analysis of image and textual data with AI. For example, image based fraud, now possible with photo based estimation, AI is able to identify image artifacts and modified pixels in an image to flag the fraudulent images.
One area of concern with AI has been - “will it take jobs away from us?”. How we look at AI is that, it makes our jobs more efficient so that we can provide the customer service and communicate with our customers, in a more timely manner. It enables the insurance carriers to leave the repetitive tasks to the AI technology and focus more on aspects which only a human can understand and feel!
Within these past couple years, it has become abundantly clear that the future of the insurance industry will be one full of technological innovations. These innovations will not only help the insurer’s bottomline, but they will also help the insured get back on their feet faster than ever before. In fact, State Farm has stated that “we are making sure we are being innovative and utilizing all the tools available, to make sure we help our customers recover as quickly as possible.”
Therefore, insurance carriers are well aware of the benefits AI innovation can bring to their consumers and they are more than willing to adopt these technological innovations as long as it improves their clients’ experience.
Early Bird Tickets for the AI in Insurance Summit end on 12 July. The summit explores the latest advances in AI tools, techniques and applications from the world’s leading innovators - working in industry, academia, and startups - across the insurance sector.
Jas Maggu is the Chief Execution Officer and co-founder of Galaxy.AI. She has been part of the boards of early stage companies and advised companies on business strategy and development. She has been founder of start-up previously and has also worked with several technology companies as part of a Venture Capital fund across various industry verticals. She has worked in three other countries apart from the US – UK, Canada and India. Jas has also received a Commonwealth Scholarship offered by University of Cambridge from where she did her Masters, and also holds Bachelors in Engineering from Panjab University.