How AI and ChatGPT can create quick wins for insurers

ChatGPT, OpenAI’s natural language processing tool, has thrust artificial intelligence (AI) into the mainstream cultural spotlight. More insurance companies are now dipping their toes into the AI pool to gauge its uses.

Swiss insurance group Helvetia is the latest insurer to announce it is testing ChatGPT for its new customer service. Fellow Swiss insurer Zurich said last month that it was experimenting with ChatGPT to find out how AI can help with tasks such as modelling, claims, and data mining.

As carriers explore this new technology, experts have pointed out that there’s one area where companies can see quick wins from AI: customer service.

“There’s been a broad misunderstanding in the insurance industry that AI will replace people altogether,” said Lawrence Buckler (pictured left), VP of sales at Sprout.ai, which uses AI to help speed up claims decisions.

“The hype around ChatGPT has raised awareness of the potential of AI. Rather than replacing people, it enables insurance professionals to provide a better customer experience.”

Sprout.ai partnered with Zurich to produce a claims automation solution in 2021. The London-based insurtech also counts major global insurers like Generali and AXA among its clients.

AI can sift through and review data at a significantly faster rate and with more accuracy than humans, freeing underwriters and claims handlers to do more high-value tasks.

“Claims handlers typically manage one line of business, which is inflexible, and they are focused on the claim and not on the customer,” said Roi Amir (pictured on the right), CEO of Sprout.ai.

“The drive to enable a claims handler to support multiple lines of business is becoming more and more real. With automation, we can make [the claims process] more customer centric.”

AI and ChatGPT among top tech trends

According to Sprout.ai’s CEO, there are three technology-led trends that are making waves in insurance:           

• Artificial intelligence or AI
• The Internet of Things (IoT)
• Parametrics

The ability to train AI models and generate a level of prediction in data allows insurers to take better care of the customers, but also to make better risk management decisions, Amir noted.

“The opportunities are almost limitless with AI,” he told Insurance Business.

IoT technologies, meanwhile, enable carriers to extend their ability to predict and prevent risk. Insurers are leveraging IoT capabilities to assist in customer interactions and accelerate and simplify claims processing.

Networked devices such as telematics and water sensors also create huge volumes of data that can help underwriters to determine risks more accurately.

Finally, bespoke and parameterized insurance solutions are becoming increasingly popular and accessible thanks to technology.

“If you have the sensors, the data, and the AI, you can tailor products specific to the customer,” Amir said.

“Insurers can innovate much more with the right technology because they can adapt it to the right customer at the right time.”

Using AI to adapt to evolving customer expectations

AI and ChatGPT could prove to be useful tools for insurance companies to adapt to the rapidly evolving demands of the market.

Sprout.ai’s research has showed that one in five (21%) of insurance consumers expected claims to be resolved within hours. One hundred percent of younger customers – aged 18-24 – wanted resolution within a week.

The research, which surveyed about 1,000 individuals who had purchased an insurance policy in the last two years, indicated the market was leaning heavily toward a digital-first approach.

“The other thing that we found across all age groups is that a good claim experience is a good predictor for people renewing their policy,” Amir said.

“62% of people that had a good experience on the claim side are likely to renew their policy, while 89% say they are likely not to renew the policy after a bad claim experience. It’s almost a guaranteed churn. Expectations are changing and they’re high.”

For Buckler, increasing market expectations means insurers need to be more flexible, which technology can help them do.

“They need to be able to respond to customer demands and be able to do that at scale,” said Buckler. “That’s where AI can play a big part.”

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