Is The Future Of Insurance Al-Driven?

The insurance industry has adopted AI in a big way and is relying on it for several backend processes from underwriting to claims processing. However, data privacy and biased recommendations remain a concern

- Meghna Maiti

The insurance industry is not untouched by AI. In fact, many innovations that the health insurance industry has seen in recent years have been driven by technology, with AI playing a large role. We list some areas which AI has impacted, whether the changes are beneficial for customers, and the caveats they come with.

Better Customer Experience

Generative AI has boosted customer retention in insurance by 14 per cent, according to a recent report by Aritvatic, an AI insurtech platform.

Personalisation And Affordability: A key benefit of AI is the personalisation it can provide by tailoring policies to individual needs. This helps insurers to come up with better pricing strategies so that costs stay low and the market doesn't become too fragmented. This also improves customer satisfaction and enhances customer engagement.

This brings us to another benefit of AI: affordability. "AI will enable the design of highly targeted products for micro-segments, which will offer better coverage at affordable premiums," says Santosh Bhat, head, advanced technology, Policybazaar, an insurance aggregator.

Quicker Policy Issuance: AI has already shortened the turnaround time in the issuance of health policies by optimising several backend processes, such as underwriting and risk assessment. "AI can assess risk with greater precision and determine fair premiums. It has also improved the claims process," says Bhat.

Simplifying Claims Process: AI in health insurance started with processing claims, finding problems in the claims process, and using advanced document intelligence. "In the next 10 years, we think AI will keep getting better. This will speed up the claims process," says Krishnan Badrinath, head, technology, Tata AIG General Insurance.