Unlocking the AI advantage for commercial lines

Insurers need to understand the huge benefits that can be accrued from artificial intelligence (AI), whilst also understanding the potential drawbacks that this new technology poses.

That’s the message that Pamela Negosanti, global vice president of insurance at artificial intelligence company Expert System, will bring to the upcoming Intelligent Automation & AI in Insurance Europe event in London on May 21.

According to Negosanti in the last 12 to 18 months Expert System has experienced a rapid increase and growing appetite for AI and applying the benefits of AI to commercial underwriting.

This is a substantial change from two years ago, when the technology was more used in the area of claims. She adds that there has also been an increasing amount of automation occurring in the industry, which is in part driving this increased interest in the potential of AI.

This is part of a much wider trend in underwriting generally. While underwriting, especially in complex and commercial lines, has always been considered as somewhat traditional in its willingness to embrace technology, recent changes in the possibilities of AI have made forced it to become more innovative over the past few years.

“You can also use technology to collect much more information about an assessment for example before underwriting the risk,” she said. “And you can also use technology to compare things like documents inconsistencies – AI is far more reliable than people in many instances.”

She explained that human beings are not as reliable as AI when it comes to document analysis; two individuals could look at the same document and come up with different conclusions, she notes. AI, on the other hand, can get a more consistent result by applying the same standards to different documents.

The starting point for applying AI to underwriting so far has been in relation to relatively low value activities from opening online documents to reading police or medical reports. She stresses that these activities are easily automated and that companies not doing this should take a hard look at business practices that are presently done by humans. They can potentially achieve many efficiencies by bringing in automation into areas that they had not previously thought about, she notes, which makes for happier clients.

“By increasing the amount of automation, you are also shortening the process [of administration] and therefore offering clients a better deal,” she said. “Another important point if that increased automation also brings in the benefits of increased standardisation – and you can apply the same logic to the same claims.”

This also has an impact in terms of compliance; with greater standardisation comes the ability to ensure policy wordings and claim assessments are consistent and ensure that they are following the correct standards, something that is increasingly important due to the level of competition in the market, as well as the increased oversight of regulators.

Furthermore, automation can also spot trends in terms of claims that might not be apparent at first glance, allowing companies to identify and deal with these trends before they become a major issue for them.

“Another important beneficial area [where automation can help] is sales capacity and business development,” she says. “By leveraging AI technology, you can augment capacity when it comes to submitting a joint bid for business. And that means that you can present many more offers.” This can also enhance a company’s capacity and augment its business services.

Negosanti also says that AI can help with the increasingly important issue of big data, which is being driven by the increasingly large number of devices, ranging from mobile phones to cars, that can record personal information on the behaviour and lifestyle of clients and enable insurance companies to tailor policies that fit their clients personally.

She adds, however, that there can be confusion around the terminology and technology, especially when it comes to AI terms like ‘natural language processing’ and ‘deep learning’. She also points out that when it comes to statistical data it has been her experience that until customers and insurers experiment with it that they will come to realise that AI is not a magic wand. It does have limitations and that they should not allow their expectations to outpace reality, she stresses.

Negosanti advises that companies using AI should exercise caution when considering how it might be used to ensure that they understand the nature of those limitations.

AI is here to stay for the insurance industry. But how it is used in the most efficient way will be the key differentiator in the market.

Pamela will be joined on stage by 40+ insurance trailblazers ready to deliver detailed case studies on how to leverage AI for commercial lines.

To secure one of the last few remaining tickets for Intelligent Automation & AI In Insurance Europe (May 21, London), register here today:  www.intelligentautomationeurope.com