Consumers Wary of AI-Driven Insurance

83% of consumers wouldn’t feel comfortable if their home, auto, or renters insurance claim was reviewed exclusively by artificial intelligence.

The property and casualty insurance industry is turning to artificial intelligence (AI) to solve its most pressing issues. Record catastrophe losses created a demand for AI-driven climate models to better predict and manage risk. The pandemic accelerated investment in touchless consumer-facing technology like AI claims processing and remote inspections.

This past August, our team at Policygenius ran a survey to gauge consumer comfort around new tech being deployed by some insurance companies. The survey found that, despite faster claims turnaround times, the potential for lower rates and other AI-enabled transformations, customers still value a human touch.

A few other key findings from the survey include:

  • 83% of consumers wouldn’t feel comfortable if their home, auto, or renters insurance claim was reviewed exclusively by artificial intelligence.
  • Around two in three consumers are resistant to the idea of purchasing insurance or filing claims on a website or app without speaking to a human being.
  • 58% of drivers said they wouldn’t use an app that collects data about their driving behavior and location, even if this resulted in significant savings.
  • 55% of homeowners said they wouldn’t install smart home devices that collect personal data, even if doing so earned them lower home insurance rates.
  • After a loss, around 43% of homeowners would agree to let a drone evaluate their property rather than a human.

See also: Survey Data Is Your Secret Weapon

Consumers still appreciate a human touch

Despite the increasing shift toward digitized insurance, customers in all age ranges still prefer the human element when it comes to purchasing coverage and filing claims. 

The survey found that 72% of consumers wouldn’t be comfortable purchasing insurance online without ever speaking to a real person, and 64% wouldn’t feel comfortable filing a claim on a website or app without human interaction. 

Claims reviews by artificial intelligence have skyrocketed in recent years as a means of cutting down on fraud and expediting the process. But just 17% of consumers said they’d feel comfortable if AI reviewed their claim from start to finish. Almost 60% said they were so uncomfortable with this scenario that they’d take the additional step of switching insurance companies to avoid start-to-finish AI claims.

Privacy concerns outweigh financial savings

Telematics and smart home tech can lead to lower premiums and risk reduction. But our survey found consumers haven’t fully embraced these products. 

Around 43% of drivers said they’d use an app that tracks their driving behavior and location if they were offered a discount. But 74% of those drivers said they’d only use such an app if it lowered their rates by more than half.  

These privacy concerns extend to homeowners and renters. Just 32% said they'd install a smart home device that collects personal data, even if doing so reduced their home or renters insurance rates by more than half. And 67% said that no home or renters insurance discount would be worth installing a smart doorbell camera that shares facial recognition data with third parties.

Consumers not ready for big tech to insure their home or car 

Consumers are also wary of the possibility of a major tech company expanding into P&C insurance. Two in three consumers said they wouldn’t be comfortable with a company like Amazon insuring their home or car, with 40% saying it would make them very uncomfortable.

Pat Howard

Profile picture for user PatHoward

Pat Howard

Pat Howard is a managing editor and licensed home insurance agent at Policygenius, where he specializes in homeowners insurance. His work and expertise has been featured in MarketWatch, Real Simple, Fox Business, VentureBeat, This Old House, Investopedia, Fatherly, Lifehacker, Better Homes & Garden, Property Casualty 360, and elsewhere.

Read More