Complex Claims keynote speaker to dissect AI's insurance impact

PropertyCasualty360: What inroads is AI making within the insurance industry? Are industry players embracing this technology?

Shawn Ram: At this point, you’d be hard-pressed to find an insurance industry player not utilizing AI. Leveraging AI is all about optimization: It can make life easier for insurers, brokers and policyholders, and most insurance providers today are realizing these benefits outweigh the risks. AI can enhance underwriting and risk selection, automate manual tasks, deliver faster services, and more.

PC360: What are the ways in which AI is impacting the insurance industry? What are the benefits that AI is bringing to the industry?

Ram: AI in insurance is about optimizing specific tasks. It can automate time-consuming processes (answering questions, filling in forms, etc.) that frees teams to focus on more complex challenges that machines are ill-suited for. Insurers need to be able to provide answers to policyholders quickly. Generative AI can assist insurers in providing broker partners and customers with the resources they need in near real-time, allowing them access to the information they need to make informed decisions about risk. At Coalition, nearly 90% of the questions in our customer support queue are essentially the same, albeit with variances in phrasing. By having AI respond to these repeatable, non-critical questions, we can quickly remove them from the queue and shift our resources to focus on answering complex questions or providing bespoke service to customers with specific needs. 
   
AI can be — and already is — instrumental in enhancing underwriting and risk selection. By leveraging AI during the underwriting process, insurers can quote more companies, increase risk selection accuracy, and increase quote-to-bind ratios. It can also transform the broker experience by speeding up the quoting and binding process, decreasing the volume of subjectivities and declines, and helping businesses become less risky.

PC360: What are the biggest challenges and complexities facing the insurance industry as it relates to the incorporation of Gen AI?

Ram: As with any new technology, there are risks with implementing AI. Today, it will not be a "set-it-and-forget-it" technology. At a minimum, it needs to be heavily monitored by humans to produce its desired results.

For example, inputting large amounts of data into an existing generative tool may seem like the easiest option, but it may not meet compliance or privacy standards. AI users who implement programs that do not comply with federal or local guidelines may also expose themselves to legal and regulatory risks, so the teams implementing them need to monitor and confirm these things.

In fact, one of the biggest risks associated with using AI is privacy. Many tools available are open source, so any confidential information, including personally identifiable information (PII), may be publicly exposed. Protecting customers' or employees' personal data in any AI implementation should be the utmost priority. 

PC360: What key lessons has the industry learned from the influx of AI?

Ram: There is a lot we are still learning about AI, but we have discovered that humans and AI are a great team. AI is perfectly suited to handle and sift through massive amounts of data, generating recommendations based on known, repeatable patterns. Human teams can then provide context to the unknowns, taking them in stride to produce meaningful conclusions and results.

We have also already learned some of the downfalls associated with adopting AI too quickly. Many organizations — regardless of industry — have adopted AI due to pressure to “keep up with the Joneses.” They see other companies adopting AI to cut costs without really considering any problems that could result. Many organizations are playing fast and loose with AI technologies without considering the privacy and regulatory repercussions I mentioned above. With a technology that evolves as fast as AI already has, users will always be a bit on the defensive.

PC360: Looking ahead, what role do you think digital technology, including AI, will play in the industry's future?

Ram: In the future, the most disruptive insurance companies will be the ones who embrace innovations as they arise. For example, cyber insurance is arguably the most innovative branch of the broader insurance industry because it has to be: It applies a concept historically built for tangible risk to something seemingly intangible, dynamic, and naturally more complex and unpredictable. The future of cyber insurance necessitates integrating new technologies, like generative AI, and continuing to leverage data to improve outcomes for both insurers and policyholders.

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Maura Keller is an award-winning Minnesota freelance writer, editor, book author and proofreader.

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