How to Think About AI in P&C

AI applications have been used for discrete tasks but will soon drive end-to-end decisions across the entire claims management experience. 

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As technology continues to reshape industries, carriers are at a tipping point, where the integration of AI can revolutionize claims management.

We see AI moving beyond discrete tasks to workflow management and strategic advisory, helping business leaders make better decisions. These AI applications will likely result in greater fluidity between humans and machines, delivering personalization to consumers at scale. 

In a recent Forrester Best Practice Report, "Identify Top AI Opportunities in Property and Casualty Insurance," analysts provide a high-level operational framework for carriers to think about expanding how they leverage advanced AI. Forrester says leveraging AI to automate decision-making for specific touchpoints in the claims process can be a great place to start. 

We are observing this in our own work with insurers and see how AI can ultimately underpin the claims journey.

The Imperative of Automated Decision-Making

Claims management, while the heart of any insurance operation, still largely relies on manual procedures, resulting in prolonged processing times, human errors and, often, customer frustration.

AI is beginning to address these issues, automating vehicle damage estimates and offering real-time reinspection predictions, cutting cycle time, improving consumer experiences and using scarce labor resources more efficiently. By using AI algorithms to analyze incoming claims data, carriers quickly assess the validity of claims, detect potential fraud and determine suitable payouts. Policyholders receive the assistance they need precisely when they need it. 

See also: A Secret Weapon Against Claims Inflation

Moving Toward Deeper Integration of AI

AI in claims management will go far beyond automating specific decisions and routing them to the appropriate person, place or channel. AI is beginning to unify and transform each experience in the process, the goal of which is to create a streamlined, customer-centric journey that understands how humans and automation can work together. 

AI-powered chatbots and virtual assistants are already capable of guiding policyholders through the claims reporting process. These tools can provide real-time assistance, answer frequently asked questions and collect necessary information in a conversational manner. The tools reduce the friction often associated with the claims reporting process during a stressful time.

AI-driven image analysis can quickly assess damage and accident detail through submitted photos, videos, telematics and descriptions. It also enables seamless handoffs to casualty and subrogation claims managers.

Moreover, AI's predictive capabilities can forecast the likelihood of claims becoming contentious or litigious. By identifying potential points of dispute early on, insurers can initiate resolution processes, ensuring smoother interactions and fostering goodwill with policyholders.

Enhancing Customer Engagement and Satisfaction

AI isn't just about operational efficiency ––  it also lets insurers tailor their communication strategies to individual policyholders, enhancing engagement and satisfaction. 

For instance, AI algorithms can analyze historical customer data to anticipate a claimant's preferred communication channel and language and can detect the level of urgency. The insights allow for timely and relevant interactions that demonstrate empathy and understanding.

AI-powered data analysis can also provide insights into common pain points in the claims process, allowing for continuous improvement.

Advancement Driven by AI

Advancing AI is introducing discussion on new strategies for implementing robust data protection measures, ensuring the explainability of AI decisions and establishing clear channels for policyholders and claimants to voice their questions and concerns.

CCC’s 2023 AI Adoption Report revealed a 60% year-over-year increase in the application of advanced AI for claims processing, with more than 14 million unique claims having been processed through 2022 using a computer vision AI solution. 

The growth in AI use was across the resolution process. The number of claims processed using four or more AI applications has more than doubled, year-over year, proving AI’s capability to drive more end-to-end decisions across the entire claims management experience.

The Industry Is Ready

With increasing complexity in vehicle technology, labor shortages, inflation and more, managing insurance claims is quickly outpacing the capabilities of human cognition alone. And consumer expectations for their experience with insurance providers continue to rise. 

Future AI models will more thoroughly leverage existing and expanded connections across providers, creating more intelligent, straight-through experiences across every aspect of the claims and repair resolution process.

We’re already seeing this. Often, AI can auto-generate a complete line-level repair estimate in seconds. This was unheard of a few short years ago.

It’s incumbent on P&C insurance businesses to consider the potential of this technology.

Yury Pensky

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Yury Pensky

Yury Pensky is vice president of product management for insurance at CCC Intelligent Solutions.

He is focused on delivering innovative solutions leveraging AI, IoT, mobile and analytics to deliver customer experience enhancements and improved claims outcomes for insurers across the P&C insurance industry.

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