Three predictions for the future use of AI

By Paul Blowers, commercial director at Future Processing.

Despite the current hype, automated data processing has been available for decades, and is likely to extend well into the future. As early as 1890, people used a simplistic punch-card system for the US census to perform automatic data processing. Now, as we approach 2024, the evolution of AI is creating equal parts excitement and trepidation across countless industries. 

AI will impact on a multitude of industries, especially with the rise of generative AI. This growth will manifest itself into unpredicted outcomes, especially for the insurance market.  

Monitoring job transitions 

Automation is already making more decisive and informed decisions than human inputters. It’s no wonder the industry finds itself in flux. An estimated 300 million jobs worldwide are expected to be replaced by AI, and automation is anticipated to cover 46% of administrative tasks. As a result, workers’ anxieties about their future may seem justified. Insurance companies looking to ‘trim the fat’ are likely to consider automation and artificially intelligent systems. It means they can streamline the workforce, reduce costs, and improve efficiency. 

But while insurance workers find themselves in a deadlock with automation, it isn’t all doom and gloom. Instead, it is likely insurers will reskill their best workers to oversee AI and automated tasks. AI platforms still need supervision, coding and regulation, and it is estimated that 40% of workers will need to consider reskilling to fill these roles. While this shift seems to be revolutionary, industries have survived change like this before. In 1913, when Henry Ford introduced the first car assembly line, workers refined their skills into specialties. This is something the data processing and insurance industries are already seeing with AI data specialist roles increasing in demand. 

While they are likely to be among the most affected, underwriters will not be the only job affected by AI. 56% of businesses now use AI for customer service. This is most often in the form of a chatbot. A chatbot can answer a customer query quickly and accurately before referring to a human advisor. 41% of customers are likely to cancel their plans due to their insurer’s lack of ‘digital capabilities’. Therefore, insurers need to work harder than ever to respond to customers swiftly, which means keeping pace with emerging technologies. 

Stronger focus on the customer experience 

Organisations that lead with a customer service driven mindset achieve 4-8% higher revenue compared to those that don’t. As a result, AI is likely to change the way insurers interact with their policyholders. In a recent roundtable from Future Processing, director of partnership development, Dawid Gladwdzin, stated that the greatest benefit of AI is time-saving and efficiency. However, insurers must also focus on how they can offer new technologies in a way that makes claims quicker for current policyholders. 

Using AI-powered technologies can give customers a more personalised experience, admits Evangelos Avramakis, head of digital ecosystems R&D at Swiss Re. Currently, customers making insurance claims have to input a vast amount of personal information. After a customer inputs this information they have to wait several days for an insurance underwriter to approve or deny their claim. Automating means that a customer can receive instant responses on their request. This makes it easier to move forward or to submit an appeal, which an underwriter can then look over. Streamlining the customer journey allows an organisation to further develop customer loyalty and brand alliance through better user experiences. 

Stricter Data Regulation 

Many people still lack an understanding of what data is and how organisations use their data. But something they are likely aware of is the term GDPR. Artur Niemczewski, non-executive director at Chartered Insurance Institute explained that data security is now a highly regulated environment, and every insurance company is aware of the requirements. 

Overregulation of technologies is not only difficult to enforce but also stifling industry development. Artur added that insurers must be transparent with customers about where the data has come from, how it is being used and who holds the rights. He also encouraged users to err on the side of caution, ensuring personal customer data is protected unless it is heavily anonymised. 

The insurance industry is risking developing these technologies so fast that it loses the human touch. From significant job disruption to the power shifting to the consumer, AI and automation’s impact on the insurance industry and data processing will be significant. Whilst navigating new data and inevitable regulations, it is likely insurers will find themselves focusing on cutting costs. This will be done through the use of AI and automation with fewer human workers overseeing the bulk of claims and requests. The future of insurance and data processing, in 2024 and beyond, will be leaner and more personalised, but potentially steeped in intense regulation. 

Image: Future Processing 

Emma Cockings Emma is a content editor for Claims Media. Emma is a experienced writer with a background in client-centric personal injury for a major firm. She has attended and reported on multiple brokerage events throughout her career.