According to a MarketResearch.biz report from July 2023, generative AI is about to change the insurance market. The report predicts that the market’s valuation will be 5.54 billion USD in 2032 — a major increase from 2022, when that number stood at 346.3 million USD.
Generative AI is multitalented, and the technology is applicable across most industries. It can translate unstructured content into easy-to-read text, and it can enhance self-service functions through the application of natural language processing (NLP) and machine learning (ML). AI-based chatbots respond in remarkably humanlike fashion, thus satisfying customers whose problems might not be addressed by understaffed insurance agents on a busy day.
Besides its potential to transform the customer experience (CX) within the insurance industry, generative AI has the potential to improve risk assessment, underwriting, claims processing, and fraud detection and prevention.
A 2023 LeewayHertz report enumerated use cases for generative AI in insurance. These use cases include personalized insurance policies, which can potentially build better customer risk profiles; automated underwriting processes that can precipitate faster approvals; real-time fraud detection that can immediately identify suspicious claims; and image and video analysis that can survey damaged vehicles and property.
Several companies have already tapped into the market. Geico’s new virtual assistant, “Kate,” uses generative AI technology to redirect customers to the appropriate resources. Though Kate doesn’t yet generate quotes for policyholders, she’s already enhancing self-service functions and improving the user experience.
Liberty Mutual is employing generative AI in the form of an “AI Auto Damage Estimator.” The AI was trained on anonymized claims photos, and it can pull from this database to provide customers with a ballpark quote for the cost of repairs.
In sum, the business benefits of generative AI in insurance are many. Here are a few salient ones, which were adapted from the 2023 LeewayHertz report.