For decades, streamlining the claims experience has been nothing short of navigating a maze without a map for the insurance industry. For customers, filing an insurance claim is hardly an experience anyone looks forward to. It usually comes in the wake of a distress, like an accident or a medical emergency or worse, an untimely loss. The trouble only gets compounded if the claims process is time-consuming and lacks clarity. For insurance companies as well, navigating a sea of unstructured claims with manual mechanisms used to be a high-wire act. But with technology coming into its own, the narrative started changing.
The past decade has seen a phenomenal rise in InsurTechs acting as a bridge between insurers and customers by harnessing the power of digitisation. Now, with artificial intelligence stepping into the spotlight, that bridge is becoming smarter, faster and far more intuitive. AI is being deployed not just to automate routine processes but to intelligently assess claims, detect fraud and assist customers in real time with conversational bots and personalised guidance.
Here’s breaking down how AI is mapping the way toward faster resolutions, fewer errors and more empathetic customer experiences.
Reshaping claims and customer experience with AI
AI’s ability to extract, analyse and act on vast sets of data in real time has brought down the turnaround time and improved efficiency significantly. Claims that once required endless paperwork, manual vetting, and back-and-forth calls are now being assessed by intelligent algorithms. These models evaluate images, hospital records, voice inputs and digital forms – all within a few seconds.
If we talk about motor insurance, AI-powered image recognition is being used to assess damages by analysing photos submitted through apps. Not just that, AI has transformed the way large-scale vehicle inspections are conducted, especially for lapsed motor insurance. Instead of physical checks, customers can now complete video-based inspections, where deep learning models analyse several attributes including odometer readings and surface damage. Generative AI adds another layer by flagging issues like poor lighting or hidden damage. The entire process is automated, completed in just 2-3 minutes and instant feedback gets delivered. This cuts down inspection time by over 70% and improves customer satisfaction.
Similarly, in health insurance, natural language processing (NLP) engines can easily scan discharge summaries and hospital invoices, matching them with policy clauses to process claims faster and more accurately. Through computer vision-driven algorithms, the processing of customer documents like KYC forms, policy papers and bank statements has been seamlessly automated. These AI models accurately extract relevant data from each document, which cuts down manual effort and review time. This translates into a gain in productivity and a smoother, more efficient backend operation.
Generative AI at the frontline for better customer experience
Coming to another equally important piece of the puzzle, which is customer experience, AI is making the entire service journey faster and more efficient. AI-powered chatbots and voicebots are now the first point of contact for many users. And they’re getting better with every conversation. They are capable of understanding multiple languages, even the regional ones, and are also equipped to handle policy queries, claims initiation and grievance redressal with increasing accuracy. In multilingual countries like India, this makes claims handling far better.
The rise of Generative AI and Large Language Models or LLMs has also made responding to complex policy queries and dealing with specific use cases much faster. What sets these systems apart is their ability to customise advice in real time. AI systems can analyse user profiles, previous interactions and browsing behaviour to offer recommendations and guidance. This allows even first-time users to ease into the conversation and make an informed decision after they have verified all aspects of the policy.
Also, it significantly improves the fitment between a customer’s needs and the product being offered. It also enables a deeper understanding of customer sentiment, accurately captures their intent to purchase and identifies their preferred communication channels, all through real-time conversations driven by generative AI.
However, most InsurTechs deploy a human-in-the-loop approach, where AI is monitored by human advisors. This is especially true for sensitive or high-stakes situations where AI reaches its edge. InsurTechs are now building sophisticated AI models that analyse speech-to-text transcripts from customer calls, helping agents understand the context and intent behind interactions. This model ensures the customer gets the due support without feeling the heat of excessive automation.
Growing investment in AI enables cost-efficiency
What’s also accelerating adoption is the growing cost-efficiency of implementing AI. Cloud-native infrastructure, open-source large language models and the democratisation of AI tools have significantly lowered the barriers to entry. As AI’s accessibility increases across the globe, it will become easier for InsurTechs to focus on the area with the highest impact – claims. And the cost of servicing claims is dropping, allowing InsurTechs to reinvest in innovation. In fact, McKinsey estimates that AI can reduce insurance operational expenses by up to 40%, with claims processing time slashed by more than 60% in some cases.
According to industry estimates, investments in AI within InsurTech have grown nearly 40% year-on-year in the past. The biggest advantage is that technology won’t just optimise existing processes, it can open up newer avenues for the industry in terms of how insurance is designed, sold and serviced.
At its best, insurance is a promise meant to cover life’s most vulnerable moments, and the claim is called the moment of truth for this very reason. As digital adoption deepens and customer expectations evolve, claims will remain the ultimate test of value for insurance. By using AI to transform the claims experience, InsurTechs are strengthening that promise with intelligent systems.
-Saurabh Tiwari, Chief Technology Officer, Policybazaar.com
