Office automation and artificial intelligence (AI) are here to stay. Thanks mainly to dystopian science fiction, many people immediately inquire when these technologies will replace human workers. Once the primary fear within blue-collar positions, now white-collar workers wonder when AI and machine learning will eventually replace them.
The answer to that question is: Not anytime soon. However, there is no clear “winner” in the debate regarding insurance agents vs. artificial intelligence. AI performs some functions better than people, but insurance remains a personalized industry that requires human perception and judgment. Barring any fantastic scenarios, AI will likely remain a partner for insurance agents rather than their replacement.
Current AI Applications in Insurance
AI already works under the radar in the insurance industry. Here are the functions it performs today.
AI excels at collecting large amounts of data and using it to create a logical conclusion. This ability makes compiling insurance quotes an ideal function for AI.
Many factors go into an insurance quote: location, claims history, risk analysis, and demographic characteristics, including age and gender. Once handled exclusively by underwriters, AI algorithms now take these factors and use them to determine the premium cost. The technology creates a quote within minutes and often with greater accuracy.
There are cases where these quotes are merely a baseline or suggestion. Some customers may need to speak with an insurance agent to customize the coverage (and quote) to fit their needs and budget better. But when those quotes get to an agent, most of the difficult work is done.
AI does not make claim decisions (yet), but it collects information about the claim.
For example, if a customer has a car accident at 3:00 AM, they no longer need to wait until the carrier’s office opens. They can upload photos, driver I.D. information, traffic tickets, and other essential data to an app and start the claim process immediately. The AI then categorizes it and assigns the matter to an adjuster.
AI sees patterns better than human workers. It processes data quicker, which also allows it to see connections faster as well.
With these connections, AI suggests other products. Shopping for homeowners’ insurance leads to inquiries about vehicle ownership and those insurance needs. For example, a quote request for a lake house may lead the AI to ask about vessel insurance or higher limits based on the risk posed by nearby water.
This point does not intend to demean human workers but points out an important distinction. Human agents make these same connections, but we are all fallible. The truth is a quote offered to a customer at 10:00 AM will not receive the same attention and enthusiasm as a quote handled at 4:00 PM on a Friday. People feel fatigued and look forward to restful weekends; AI will never face that limitation.
Insurance agency and carrier websites often use chatbots to handle more straightforward questions and reduce workload. They enhance customer service when human intervention is not available.
A chatbot can guide users through websites, provide new I.D. cards, and help customers find their payment due date. If the question is complex, chatbots lead users to an agent or adjuster to address it. It is a triage system that automates the more effortless customer inquiries and moves the challenging ones up in line.
What Does the Future Hold?
McKinsey & Company believes the insurance industry “is on the verge of a seismic tech-driven shift.” It predicts mind-blowing scenarios, including completely automated claims handling and apps that advise customers when a decision could raise their premium. But it also doesn’t see any of these changes become a reality until 2030.
Insurance fraud takes $80 billion a year from consumers. The results include higher premium costs, more intrusive claim investigations, and slower claim processing. So, it is little wonder that insurance companies want advanced fraud detection.
Facial recognition software plays a significant role in this possibility. The software already prevents an unauthorized person from accessing personal financial or insurance information. Developers also seek to add an AI angle that analyzes expressions and ticks to see if people are truthful. Another possibility is voice analysis; unintentional voice changes can also indicate if someone is not entirely upfront. The main trick is making it refined enough that it does not construe emotions or nervousness as lying.
There are already trackers in cars that analyze driving habits and offer customers discounts. But other trackers may also help in risk analysis in areas other than auto insurance.
The life insurance industry may benefit from another function of facial recognition software. It can take a photo of a customer and progressively age it to give the agent an idea of how that person will age. Also, health apps on phones and wearable fitness trackers may even integrate with life and health insurance to assess an individual’s risk.
Underwriting for personal and small business insurance products may become completely automated. This result has been in development for some time; it was not too long ago when agents had to type each policy sold to a customer.
In the future, underwriting takes a few seconds for basic policies. The automation arises from a combination of machine learning and deep learning technology that assesses specific data about the customer and external data regarding their location, habits, and circumstances. Once created, the insured can immediately review the policy and either accept it or discuss it further with a human agent.
AI will continue handling the early steps in claim processing. However, a greater network in AI technology will automate the claims process further. Data capture technologies, including sensors and drones, will automatically log losses rather than wait for the customer to report them. For example, if there is a car accident, a drone can pick up on it, download license plate data, and alert all the insurance companies connected to the vehicles. In more fantastic scenarios, autonomous cars will drive themselves to repair stations while also summoning loaner cars to their owners stuck at the accident scene.
In property claims, sensors can analyze temperature and water levels during natural disasters. There are even some scenarios where the sensors warn property owners of risks and advise of issues before they arise. With technology, insurance can become less reactive and proactively focus on monitoring, reducing, and preventing risk.
McKinsey & Company sees insurance claims taking minutes to approve and pay, rather than the weeks they require now. However, they concede that contested claims will still require human invention and negotiation. AI will still provide and process data, but people make the final decision.
The Personal Touch
If this all sounds like an overwhelming science-fiction scenario–fear not. Insurance remains a personal product. Even as AI expands, there still needs to be human involvement.
AI can do the rote stuff, including calculations, risk analysis, and premium pricing. But chatbots cannot offer expert advice on choosing policy limits. AI cannot give details on products, services, and carriers like an insurance agent who interacts daily with industry professionals. Smart technologies may gain that sophistication, but Forbes predicts there is no way that can happen before 2033, assuming it occurs at all. No matter its advancement, AI will never fully appreciate the risks and wonders of being human.
Consider it a team member rather than worry about AI replacing your agency, agents, and sales staff. Chances are, your employees do not enjoy repetitive and tedious tasks, and despite their talents, they may prefer that machines make the precise calculations. Let machine learning take those jobs while your agents focus on connecting with customers and performing the unique functions AI will never take over.
In this quick-changing world, you need guidance and support. The American Agents Alliance offers insurance products, lead building services, and career-enhancing opportunities that will help you make the transition to new technology tools like AI. Learn how to be a member and start enjoying our benefits today.