Debunking the myths around AI


The myths around the adoption of AI were debunked during a presentation, Demystifying AI for Automotive Claims, at ILC’s ClaimsTech Live 2023 event.

Delivered by Irene Castelanotti, International Marketing Director for Claims, Solera Audatex, the session highlighted the impact AI is having on all sectors, and urged insurers to cast aside their doubts and embrace the benefits that can be achieved in terms of efficiency and customer service.

Irene said, “AI is affecting all of us right now. It is affecting different industries, different job roles at different levels in the hierarchy, and at different paces.”

However, she believes there is a stubborn reluctance to adopt AI because of misconceived fears that it will replace jobs, be difficult to implement, and is viewed sceptically by customers.

Complex

Addressing these concerns, she said, “AI won’t replace people in claims for three reasons. The first is that the claims decision-making process is extremely complex, and while we’re using AI to help us in some aspects it would not cope with the whole process. We need humans for the more complex cases.

“We also require humans to develop regulation and to monitor the ethics behind the development and usage of AI. No one wants algorithms that work instead of people; we want algorithms that work for people.

“The third reason we need human involvement is customer trust. It’s true that customers require a far more digitalised experience these days, but at certain points in the claims process a human touch is required because that builds trust and engagement.”

Benefits

The benefits of AI, in terms of savings, underwriting and customer service, are substantial.

Irene revealed that underwriters in America dedicate 40% of their time to non-core activities. That equates to a loss of productivity valued at between $80bn and $160bn over five years. Further, the loss to American insurers of customers switching providers for a better digital experience is estimated at $170bn over the next five years.

AI, by freeing up human resources to focus on what matters while at the same time streamlining service, can go a long way to mitigating both losses.

Underwriting

Irene also said that AI can greatly improve underwriting, reducing the risk of fraud and improving both accuracy and terms.

She said, “By understanding not only who our customers are but what they want and how they are behaving, we will able to be more precise in risk assessment and change the way we deliver our services. AI can also reduce fraud by identifying patterns and using natural language processing analysis to map the content of the conversation with the sentiment and flag any discrepancies.”

Of course, understanding the customer better requires personal information and that can challenge data protection regulations. However, Irene believes that customer hesitation is over-stated and if sharing data improves both service and terms then most are supportive.

Personalised

She cited an EY survey that found that 71% of respondents would be in favour of data sharing if it led to a more personalised offering, while further research carried out by Solera Audatex revealed that 71% of customers would switch insurers to one which delivered a more digital experience.

She said, “We know we have space to grow in claims management, and that there is a significant potential loss. But AI can enhance the customer experience, enabling us to widen our solutions portfolio and better understand who our customers are and what they want.”

She concluded, “The future of claims management is using AI to deliver a completely connected and seamless management process, with human intervention only when it is required and decisions taken faster.”

ClaimsTech Live 2023 took place in September at etc venues, 133 Houndsditch, London – backed by Headline Sponsor CoreLogic, along with Gold Sponsors Entegral, Solera Audatex and Verisk, and Silver Sponsor Synergy Cloud.  

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