A technological breakthrough that is increasingly being used in various industries like insurance is the technology of artificial intelligence (AI). By 2030, claim processing is expected to remain the main function of the operator. In fact, the number of heads associated with claims has reduced by 70 to 90 percent when compared to the statistics revealed in 2018. With AI, advanced algorithms handle routing of initial claims while increasing both efficiency and accuracy. In the same manner, claims for private lines and small business insurances are largely automated, and this allows operators to achieve more than 90 percent direct processing rates and dramatically reduce the processing time for claims from days into hours or even minutes.
IoT sensors and various data retrieval technologies, such as drones, are replacing the traditional manual methods when dealing with first notice of loss (FNOL). Triage claims and repair services are often triggered automatically during a loss. In the case of a car accident, for example, policyholders capture the damage with video streaming and is later translated to describe the extent of the loss and estimate the amount.
For more complex cases like large-scale disaster claims, insurance companies monitor homes and vehicles in real time using IoT, telematics, and integrated mobile data while assuming that cellular and powered telephone services were not disturbed in the area. When the electricity goes out, insurance companies can profile claims by using data aggregators, which combine data from satellites, network drones, weather services and policyholder data in real time. This system is tested by the largest operators during various types of natural disasters so that a more accurate and reliable estimation of the loss incurred can be produced during actual emergencies. Also, detailed reports are automatically given to reinsurance for faster reinsurance capital flows.
Since operators understand that prices remain important in consumer decision-making, operators continue to innovate to reduce pure competition on prices. In some segments, price competition increases and thin margins are the norms. On the other hand, other segments provide unique insurance offers to allow expansion and differentiation of margins. In jurisdictions where change is implemented, the pace of pricing innovation is rapid. Today, prices are available in real time based on dynamic and data-rich use and risk assessment, which empower consumers to make informed decisions about how their actions affect coverage, insurance, and prices. With a sophisticated exclusive platform, AI breakthroughs continue to connect customers and insurance companies while offering different experiences, features and value to the customers.