Once the realm of science fiction, Artificial Intelligence (AI) is quickly becoming part of our lives. In the business world, insurers can use AI to improve business models and the customer experience.
At its essence, AI is about embedding human intelligence into machines, enabling systems to learn, adapt and develop solutions to problems on their own. Given the promise it holds, global financing to AI start-ups has expanded an average of 62 percent annually since 2011, according to a recent estimate by UK technology provider Trustmarque.
In keeping with the Ubers, Apples and Amazons of the world – as well as the ever-burgeoning breed of innovative financial services and fintech firms before them – insurance companies are looking to shed their staid images and jump on the AI bandwagon. A number of established underwriters are already in the process of integrating AI into existing operations. For example, Swiss Re announced in late 2015 that it is working with IBM Watson to enable human advisors to spot emerging trends more quickly so that they can develop a targeted range of underwriting solutions and achieve more accurate risk pricing. Through a partnership with voice recognition company Nuance Communications, Manulife analyzes unique voice characteristics to create individual "voiceprints" for customers. When customers call in to access their accounts, there's no need for a conventional password and PIN – their voice is compared with a stored voiceprint. If there's a match, access is granted.
Meanwhile, new firms in the insurance sector have sprouted up, built on AI automation. Insurify.com enables customers to generate price quotes from a variety of insurers by simply texting a photo of their license plate. ZestFinance is pairing advanced analytics with non-traditional data sources to establish credit scores for people who may not have had credit in the past.