Disrupting Finance by Unknown

Author:Unknown
Language: eng
Format: epub
ISBN: 9783030023300
Publisher: Springer International Publishing

5.4.2 AI in Claims Management Process

Presently, AI is also taking over administration associated with run of the mill claims. In one particular case in Japan, an AI system has replaced a team of 30 employees calculating payouts for policyholders (McCurry 2017).

This is not all doom and gloom from an employment perspective as developments may lead to claims handlers dealing with the more challenging claims rather than the tedious ones. For example, Lemonade, a start-up property insurance company, has developed an automated claims process and filing a new claim became relatively easy. The smartphone application will ask the policyholder some generic questions to gather basic information on the claim. The insured does not have to complete a claim form but provide a summary of the claim such as what property was damaged, through the smartphone camera. The data provided will be analysed by the AI and run through 18 anti-fraud algorithms. Non-complex claims are approved within seconds whilst complicated claims are handed over to humans in the claims department.

The use of technology is not only pointing out but also easing the management of complex claims such as, making use of drones to take aerial photos of significant property damage and image analytics to quantify the extent of the damage (Cognizant 2017).

Fraud is reported to represent 10% of all claims in Europe (Insurance Europe 2013). Rather than relying on experienced humans to detect fraud, insurance companies are opting for AI to investigate certain dishonest patterns. An Australian tech company developed an AI fraud investigation system that provides support to insurance companies in the detection of fraudulent claims. Whilst the scope of this AI technology is to assist claims handlers in preventing fraud, it also reduces administration costs for insurance companies. The system can investigate social media accounts, criminal records, property and vehicle history and other documentation submitted with the claim, thus enabling more time for the claims department to analyse results and close claims in a timely manner. Similar services that weed out possible fraudulent policyholders at underwriting stage are available in the market (e.g., ThreatMetrix).

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