Insurance is often slow to adapt to technological change. In an industry dubbed risk management, it’s no surprise that insurers and underwriting professionals are often wary of the next ‘new thing’. However, technology is reaching a stage where applications of artificial intelligence (AI) are no longer all that new – and for insurance professionals, this is a very good thing! AI and software has long been adopted by the insurance sector and is poised to continue their coexistence going forward.
Today’s AI tools are not only robust enough for insurers to rely on, they can also save claims professionals a considerable amount of time. In a paperwork-heavy industry such as claims, this means an improved experience through cost savings and efficiencies for all parties involved in a claims case. Modern technology can recognize and index unstructured data, triage claims based on complexity, or process hundreds of pages of documents in minutes. Technology isn’t only beneficial for profit margins, it’s also positive for knowledge workers, claimants, and their families.
All of the above indicates that insurance technology is here to stay. In the insurtech world, that means faster, smoother, more reliable claims. For the claims industry as a whole, it equates to less – not more – risk.
Insurtech helps process claims faster
Despite the insurance industry’s historical reluctance to innovate, executives are taking notice. In one study of insurance industry decision makers done by LexisNexis Risk Solutions, nearly all carriers were using a virtual claims process even before the pandemic. Now, over half of insurance decision makers are planning to invest in upgrading their processes and modernizing their tech.
It’s not just for cost savings, either! KPMG analysts suggest insurtech adoption is driving meaningful change in the industry: facilitating scenario-based insurance, more customized insurance products, enhanced underwriting accuracy, and faster settlement of claims. Technology is a building block for the insurance of the future. Designed to process large amounts of data quickly, accurately, and at a lower cost, today’s tech is a tailor-made fit for the claims space.
Insurtech improves underwriting accuracy
Property and casualty underwriting losses exceeded $24B in the first half of 2023. Pressures on the industry include changing working environments and lifestyle patterns, catastrophic weather events, an aging population and the lingering effects of the pandemic. Combined with economic factors like inflation, more and more insurers are making a push for change.
Despite growing premiums, insurers are paying out more than they earn. With the underwriting loss for 2023 already topping out what it was in 2022, providers are facing no choice but to innovate. By unlocking the potential within the volumes of claimant and patient data, AI-powered tools shape and refine the underwriting process. Innovation doesn’t just look like faster claims – it can also mean larger, and more stable, profit margins.
Insurtech improves claimant outcomes
Automation can reduce the cost of claims by 30%. Technology has the power to process data faster than humans, with AI able to ‘crunch numbers’ at volumes far beyond human scale. With today’s underwriters spending almost half of their time on non-core activities, the manual and often labor intensive job of today’s insurance professional could undergo a seismic shift.
Improving the processing time of manually intense tasks or paperwork heavy workflows means claimants get assistance faster and claims files include less mistakes. Faster resolution of a claim, whether it’s related to personal injury or workers’ compensation, leads to better patient outcomes as a whole. It also helps create flexible work schedules, virtual offices, and makes better use of knowledge worker time.
Technology and AI adoption for insurance sector poised to scale
Technological advances are no longer new, and insurtech solutions present a novel new angle to one of the oldest industries in the world. By harnessing the power of modern technology, insurers can better prepare for the financial, economic, and environmental pressures of an unpredictable global world: which goes a long way towards managing industry risk.
Connor Atchison is the Founder and CEO of Wisedocs. Connor founded Wisedocs to reimagine claims through bringing automation and intelligent medical record processing and reviews to the insurance ecosystem and their claimants.