By Lisa Seguin, Field Marketing Manager, Insurance, Element AI —
In 2020, it’s difficult to think of a sector that artificial intelligence (AI) won’t disrupt. The technology promises to transform businesses ranging from transportation to telecommunications, while also holding promise for sectors held back by manual processes and legacy technology. Insurance is one such sector.
Insurance is striving to modernize, and AI can help streamline processes within multiple areas, including underwriting and business intelligence. As professionals responsible for taking on commercial risk, underwriters are under pressure to assess applications accurately and with a high level of technical detail. This involves analyzing past decisions and mining extensive application documents for necessary information.
“A commercial property inspection document may be up to 50 pages long,” explains Charles Dugas, an AI expert, who has worked as an actuarial analyst and lectured on actuarial science. “You’re trying to sift through these pages in order to retrieve a single piece of information.”
Now, imagine repeating that manual process for each new application. This slows down the underwriting process, which is often a race toward a fast policy decision.
“Brokers will send the same piece of information to various insurers,” says Dugas. “In some cases, they’ll choose between the first few quotes that come in, so if you’re too slow at processing submissions, you may not get a chance to bid on a piece of business, even though your price might be the best.”
Insurance managers have a separate challenge as they try to keep insurance operations hitting their critical business targets, such as cost per claim, claims ratio, and settlement times. Fast-evolving business and social conditions, such as those we’ve seen in 2020, can affect these metrics. Because many managers and actuaries frequently work with legacy systems where metrics are not readily available, and accessing and processing them is a manual and time-consuming task, it is only performed so often. As a result, operations risk flying blind as they decide how to allocate staff time and resources based on outdated information.
How AI Can Help
AI tools, like those offered by Element AI, can help in two essential ways.
First, Element AI’s Document Intelligence product is used to accelerate and automate the processing of semi-structured and unstructured documents, such as incoming broker submissions. Additional features, like business identity code identification, auto-declining submissions outside an insurer’s risk appetite, and intelligent submission triaging, contribute to dramatically reducing the time spent processing broker submissions. Ultimately, this benefits insurers by enabling faster broker response times and by ensuring underwriters prioritize the most valuable opportunities for the business.
Second, Element AI’s Knowledge Scout enables computers to speak like humans, rather than forcing users to learn database query languages like SQL. This enables underwriters and business specialists to ask questions in natural language, just like they would if they were asking a person. For instance, an underwriter can retrieve relevant data by posing simple inquiries, such as, “List all claims related to business activity code 5812 from the past 10 years.” Within a matter of seconds, they can find specific information contained in long, detailed documents, like the location of a fireplace as listed in a property inspection document. The benefits of providing easier and more rapid access to information for underwriters are clear: They can make more confident and more consistent underwriting decisions, in addition to unlocking valuable efficiency gains.
Element AI’s Knowledge Scout empowers managers to make decisions based on current conditions instead of what they see in the rear-view mirror, adds Dugas. “Managers may face ad hoc questions that crop up,” he explains. “What is causing higher accident frequencies? Why are we not closing more business? Why are we seeing poor results in a particular line of business? Now they can ask their questions in natural language and get answers quickly.”
Streamlining the underwriting and management processes yields several critical business benefits for insurers, including faster customer service. Expedited application processing enables insurers to serve broker queries more quickly, potentially cutting submission processing times by up to 55 per cent, according to Element AI’s data. Because brokers often award policies on a first-past-the-post basis, reducing these delays also helps insurers beat the competition.
Furthermore, AI enables underwriters to process submissions more consistently and accurately. They can decide whether to accept a policy and determine pricing based on more comprehensive data. Lastly, by continually harvesting knowledge from new underwriting decisions, AI creates a platform for continuous improvement. An up-to-date knowledge base encompassing the latest applications and decisions gives underwriters immediate and automatic access to all other underwriting decisions in the company.
A Step-Change in Functionality
AI represents an unprecedented opportunity for insurance companies to improve the way they operate. Most technology developments offer incremental benefits, bettering performance a little at a time. Oftentimes, when productivity software companies introduce document macros and database companies refine their indexing, it doesn’t impact business users in meaningful ways. But when a technology enables people to collect and harvest knowledge in entirely new formats, it’s transformative.
AI offers a step-change in business benefits, dramatically boosting business capabilities in measurable ways that can affect the bottom line and make insurers more competitive.
Read more about how Element AI’s tools can streamline operations at your insurance company.
About Element AI
Element AI is a global developer of AI software that helps people work smarter. Founded in 2016 by serial entrepreneurs including JF Gagné and A.M.Turing Award recipient, Yoshua Bengio, PhD, Element AI turns cutting-edge research and industry expertise into software solutions that exponentially learn and improve. Its end-to-end offering, including advisory services, AI enablement tools and products, aims at helping large organizations operationalize AI and create real business impact. Element AI maintains a strong connection to academia through research collaborations and takes a leadership position in policy-making around the impact of technology on society.
For additional information, visit www.elementai.com.
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SOURCE: Element AI via FleishmanHillard HighRoad