Beneath the Surface: Why Insurers Should Look Beyond “the Tip of the A.I. Iceberg”

Nearly 75% of respondents in a recent survey from the Coalition Against Insurance Fraud and Shift Technology said they believe that among relevant technology, artificial intelligence (A.I.) will have the greatest impact on claims and fraud detection over the next five years.

However, Coalition Against Insurance Fraud Executive Director Matthew Smith says this is likely just the beginning in terms of A.I.’s impact on the insurance industry.

“We are literally at the tip of the A.I. iceberg in 2020,” he says. “Insurers are just starting to use it.”

In this episode of the Insuring Cyber Podcast, Smith discusses how insurers are using A.I. technology to detect and prevent fraud.

In fact, nearly all of the surveyed insurers in the Coalition and Shift Technology’s September research report said they’re using anti-fraud technology, and more than half of surveyed insurers said they’re specifically using A.I. technology as part of their anti-fraud strategy.

“If we get it right, it’s going to be the greatest thing we’ve ever had to fight insurance fraud,” he says.

Also in this episode, Itay Bengad, CEO and co-founder of MDgo, discusses how the use of A.I. is serving as a benefit for claims processing in insurance. MDgo is a provider of accident detection and response technology for the insurance industry.

“At the most basic level, the claims process can be automated to reduce the amount of manual labor,” he says. “At higher levels of A.I., it is possible to introduce new data sources to the claims process, making it faster or more predictable, efficient, personalized.”

Bengad sees A.I. as a benefit to the insurance claims process because the data can be leveraged to improve the level of service personalization, which can have a direct impact on a carrier’s expenses, customer retention and operations, he says.

“That’s I think the place where A.I. has the most potential effect within insurance carriers,” he says.

Smith and Bengad both also discuss in this episode why insurers may be hesitant to embrace A.I. due to data privacy concerns and how insurers can navigate these challenges in order to take advantage of this technology.

“The risk is great, but the advantages are even greater for us if we get it right…” Smith says. “The number one thing that we at the Coalition tell our insurance members about artificial intelligence is to embrace it. Do not be afraid of it.”

New episodes of the Insuring Cyber Podcast are published every other Wednesday together with the Insuring Cyber newsletter.