Artificial IntelligenceMachine Learning

Machine Learning in Insurance: A Trend or a Turning Point

The insurance company has historically been slow to embrace new technologies but with the COVID-19 crisis and changing customer expectations, that is starting to change. Now, more and more insurance companies are looking for ways to leverage modern-day solutions. An increasing number of businesses are realizing the applications of machine learning in insurance. ML and AI in insurance are currently playing a crucial role in the industry. From fraud detection and risk management to customer support and insurance underwriting, these technologies have proven critical. Let’s explore how machine learning in insurance is driving next-gen business transformation. Do check out the best Machine Learning Training, which will help you acquire comprehensive skills to build an ML model from scratch and get a job in the trendy ML domain.

The Growth and Role of Machine Learning in Insurance

For a long time, insurance data analysis has largely been a manual and labor-intensive process conducted by different departments.  With the emergence of technologies like machine learning and artificial intelligence, the insurance industry has started transitioning to a more agile, data-first model.

The Coronavirus pandemic coupled with increasing competition, rising customer demands, and rapid digitization is serving as a catalyst for sweeping reforms within the industry. Now, the usage of machine learning in insurance is widespread. The key force driving the growth of ML and AI in insurance is the greater accessibility and uptake of the technology. Businesses no longer have to look far and wide while searching for talent to develop proprietary applications. And of course, the simpler way of achieving tech-based growth is through outsourcing or purchasing such tools directly from experts.

Moreover, the exploding volume, variety, and speed of data growth have pushed organizations to invest in tools and infrastructure for managing large amounts of data. The infrastructure acts as a breeding ground for the development of machine learning applications.

ML as a Catalyst of Next-Gen Business

The importance of machine learning in insurance cannot be overstated. It helps insurance companies reach their full potential. As technologies like ML and AI in insurance standardize across the industry, becoming an ML-powered organization will likely be the key for survival.

The Next Generation of Insurance Underwriting

Underwriting efficiency has been sidelined for quite some time. In the past few decades, insurance companies tended to focus on raising their bottom lines.  A majority of insurance agencies use historical customer data to perform credit cracks for the purpose of underwriting. However, things are changing now. Rather than focusing on bagging new business, underwriters now have to also cater to customer experience, risk management, and cutting costs.

By introducing machine learning in underwriting, insurers can transform the process. The algorithms can be trained across an array of client cases and they can effectively detect potential defaulters. With technologies like machine learning, artificial intelligence, and predictive analytics the underwriting process becomes easier, faster, and more accurate.

When it comes to risk management, machine learning can be used for analyzing aerial imageries and offering valuable intelligence and risk information.

Lastly, a massive payoff of machine learning insurance underwriting is improved decision making. It helps underwriters make data-driven decisions and save time. Also, by applying AI in insurance underwriting, underwriters can leverage the power of automation and use up the saved time to focus on more complex tasks.

Building Resilience Against Next=Gen Threats

While the coronavirus global health crisis has unleashed new avenues for insurance companies in terms of digital service options, fast-paced digital transformation and disruption have also stirred up an evolution in insurance fraud. As more and more insurance companies are leveraging digitized processes to adjudicate claims, miscreants are capitalizing on new fraud opportunities. In order to effectively and efficiently detect and mitigate fraud. Insurance companies will have to adapt powerful technologies to address the next-gen threats.

Machine learning in insurance can facilitate fraud detection. ML-based algorithms can help in identifying internet protocols, machine anomalies, and fraudulent behavior. Owing to massive digitalization, insurance companies now have access to new and improved information, which can be leveraged for detecting fraud faster.

Final Words

As we can see, machine learning in insurance is no longer just a trend. Given its growing number of applications and use cases, it has emerged as the way to progress. The new developments in the technology are making it even more powerful, beneficial, and affordable to insurers. It is clear that technologies like ML and AI in insurance are here to stay, possibly forever.

Faheem Shakeel

Practice Head - Insurance Technology and Services with 15 years of experience in solution delivery and project management of Software Development for Insurtech market space. Faheen is associated with Damco Solutions, for over a decade, which is a software solution provider wherein his role is to put forward a result oriented approach of technical feasibility for the dynamic insurance client base. He works closely in strategizing digital transformation for insurance brokers and insurance companies for better, handy CRM experience combined with proactive planning of path forward to meet their core challenges. Faheen has also built market leading COTS Insurance Platforms and successfully bridged technical gaps for the insurers across the USA, UK, Caribbean Island and Indian subcontinent.

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