The AI industry is growing at a rapid pace. By 2030, the industry is expected to grow at a compound annual growth rate of 38.1% from USD 93.5 billion in 2021.
Today, AI is being used in every industry to help empower every aspect of business, disrupting and improving business models to help organizations get the most out of their operations.
In 2023, AI will continue to gain an increasing amount of traction in the insurance industry.
Why is this? In part, this is due to the fact that AI technology has matured significantly and there is an increasing amount of data that insurers have been gathering about their customers.
It is predicted that the adoption of AI will accelerate over the next few years as more insurance companies will utilize the technology to automate tasks and make more informed decisions.
Taking a look at a few current trends within the insurance industry for 2023, we look at how insurers implementing AI can meet customer expectations, drive business value and see significant ROI.
Claims management automation remains top of mind
Many insurers are still struggling with one of the most crucial functions within their business: The claims management process.
2023 will see insurers setting a sharp focus on adopting innovative technologies that can help to automate the process of claims management more effectively. At umAI we have seen just how eager insurance companies have been to adopt AI technologies to better help manage this process.
AI can help several areas of the claims management process, from enabling handlers to better derive insights from documentation to increasing the speed at which claims are improved and to detecting fraud at unparalleled accuracy. As insurers implement AI to manage their claims, they will be able to improve customer service as well as save time, resources, and capital.
The rise of digital channels and customer data
Over the past few years insurers have been needing to increase the use of digital channels as consumers today are demanding greater access to digital experiences. In the coming years this trend is sure to only grow stronger. For insurers that have already adopted these digital channels, they are seeing major benefits, as these channels generate a huge amount of consumer data for them which is extremely important.
With this data insurers can feed important insights into AI models that will help to improve different functions within their organizations. Most importantly these insights can be utilized for claim-handling processes, allowing insurers to quickly extract and analyze important data about consumers which will enable them to automate claims-handling processes and improve fraud detection.
Making AI Explainable
Explainable AI has become a hot topic in recent years.
AI models and technology continue to be very difficult to understand for the vast majority of people.
Explainable AI is an output for AI systems that gives an explanation and a reason for how the AI models reached their conclusions. The system is used to help humans in the decision-making process.
As insurers have been increasingly adopting AI systems within their business over the last few years, the need to give these tools more validity has increased. This is where explainable AI will fill a big gap.
In the coming year insurers will be looking to adopt explainable AI systems in order to ensure that their employees can understand how these systems have come to their decision and, importantly, to also identify instances where these systems may have made incorrect decisions.
Changing business attitudes
The insurance industry is often referred to as a legacy industry. An industry that has been around for a long time, that is slow to adopt innovation.
However, in the last few years, innovation has taken center stage within the industry. In 2023 innovation is set to explode across the sector. This comes as a profound mind-shift is taking place amongst industry leaders.
Insurance leaders of today have more of an understanding of the importance of innovation and digital transformation. They better understand the limitations of sticking to the ‘status quo’ and are eager to work on more agile models focused on exploring the role of digital within their sectors. With the rise of new technologies, insurers have to keep up with the pace of change to remain competitive in a changing market and they are eager to tackle that challenge head on.
We see a major positive shift in the industry, with it being reported that today, 87% of carriers invest more than $5m per year in AI-related technologies. The number is higher than that of both banks (86%) and consumer goods and retail companies (63%), which have been businesses that have been further ahead in the innovation curve historically.
This is an incredibly important shift that has come in the last few years and will continue to make more headway in the year to come.
The rise of Insurtech solution providers
It is often said that innovation is difficult to manage within large organizations. The rate at which large organizations can implement innovation is slow due to several hurdles.
Insurance companies are more then aware of this issue within their industry and are looking for ways in which they can adopt technologies faster and more effectively.
The rise of Insurtech solution providers is a response to the current state of the insurance industry. As new technologies and business models emerge, insurers are finding new ways to operate and disrupt traditional models.
In the coming years, Insurance companies will be increasingly working with Insurtech providers to support them with the adoption of new innovative technologies that will support their business operations on all levels.
This is a critical change in the industry which is sure to help traditional insurers step up their digital transformation.
What a wild ride AI has had over the last few years! 2023 is set to be an extremely important year for AI in the insurance industry. Many trends in the insurance sector have set forth the case for AI to help improve operations, from the increasing need to optimize claims management processes to the rise of innovation in the industry.
It is clear that insurance companies are looking at how different areas of insurance operation can benefit from new technologies. AI and big data technologies are helping insurers embrace the next era of transformation that will be sure to advance the sector like never before.
What are you waiting for? See how umAI can help to improve your claims handling operation with the latest in AI technologies.