From due diligence to identifying cyber threats and even part of the underwriting process, AI is rising in use.
Insurance companies are discovering that artificial intelligence (AI) has the potential to improve the efficiency of the underwriting process, as well as to provide added security and due diligence assistance.
While cyber criminals are using AI to try to convincingly defraud insurers, insurers are also using the tech.
Generative artificial intelligence is moving quickly, and insurance companies are moving to try to work it into their underwriting process as cyber threats continue to grow in number and complexity. Moreover, many cyber criminals are developing their attacks using AI, meaning that insurers that want to be able to keep up with protecting themselves from those threats will need to focus on understanding and using this technology as well.
That said, artificial intelligence is being used for far more than identifying and counteracting cyber threats. Insurers are also using the technology to conduct risk assessments for potential clients seeking to purchase coverage. This process will usually require a substantial time commitment for an underwriter in order to complete all the administrative tasks.
A 2022 Accenture report showed that 40 percent of an underwriter’s time is spent on just this type of task, representing an efficiency loss as high as $160 billion throughout the insurance industry every five years.
AI informed automation can help insurance companies to accelerate underwriting workflow.
This means that process times will also be able to speed up, and insights can become available that wouldn’t have been possible for an underwriter to manually track down.
“We want to make sure we have good clients on the books,” explained SRA 831(b) Admin CEO and founder Van Carlson. The company is a strategic risk alternatives firm offering small- and medium-sized businesses plans to protect themselves from risk through self-insurance. “We’ve actually had AI in the past catch some issues with clients.”
According to Carlson, insurance companies are benefitting from artificial intelligence’s ability during the underwriting process to conduct more profound searches into risks associated with individuals and businesses seeking various types of coverage.
