AI innovations transforming the insurance sector

It’s hard to talk about the future of almost any industry without mentioning artificial intelligence (AI), and the insurance industry is no different. AI technology automates tasks that would typically be performed by humans, such as collecting information, analyzing it and making inferences. AI works best when it can ingest large volumes of data. Armed with that data, insurance professionals will be looking for ways to use AI technology to make the process of customer service, sales, and underwriting and pricing more efficient and seamless.  

The use of AI in insurance is relatively new. While only a quarter (24%) of principals are currently investing in AI, half (48%) plan to within the next year.¹ As the technology develops, insurers will continue to innovate to leverage the power of AI to transform the industry and improve the overall customer experience. 

The impact of AI in insurance

Traditionally, the insurance industry has functioned reactively—it detects trends and adjusts accordingly. However, with its ability to take huge swaths of data to reason, learn and problem-solve, AI is helping to push the industry into a proactive state of prediction and prevention.  When it comes to use cases, most principals would like to use the technology to automate data entry (45%) or summarize client history or policy details (44%).¹ While AI has the potential to revolutionize even the smallest of processes, its immediate impacts are being unlocked in the following areas across the insurance industry: 

1. Customer service: The customer touch point is, by nature, a prominent aspect of the insurance process and AI is revolutionizing the technological backbone of agencies, infusing systems with intelligence and agility. Advancements in this area have the potential to make the user experience more accessible while at the same time freeing up resources to individual inquiries with a human touch. By integrating AI-driven analytics across various platforms such as agency management systems, communication platforms and content management systems, you gain a holistic view of client interactions. This interconnectedness empowers you to deliver a consistent and personalized client experience. It also facilitates real-time data analysis, allowing you to adapt strategies swiftly in response to market changes. When it comes to the tasks principal agents trust AI to manage, 60% said customer service, second to writing marketing copy.¹ 
2. Claims: Continuing with the impact of AI in claims, customers can benefit from these enhancements. AI has the potential to shorten claims processing times.² Less time processing claims could lead to faster resolution of customers’ issues. AI in claims can provide agents with the right information at the right time. The time agents may have previously spent on routine manual claims work can be used to focus on higher-skilled, valuable tasks. Moreover, AI-powered machine learning can streamline claims processing. For example, new tools can help analyze images and other data, to quickly review and resolve claims.³  
3. Underwriting and pricing: The underwriting process is complex, but AI technology can accelerate and improve many associated tasks. Insurance companies can use AI in underwriting to analyze vast, unstructured datasets that exceed human capacity, enabling faster and more accurate risk assessment. This can provide greater consistency, transparency, and reduce the time needed to implement new pricing into the system. 
4. Sales: A sophisticated distribution strategy is an important facet of boosting a business. For example, artificial intelligence can open up new digital sales channels and strategies while simplifying the process for agents and brokers through integration with third-party sales applications. 
5. Risk prevention: Through advanced data analytics, AI allows insurance professionals to quickly review complex datasets, including historical claims records, customer information, market trends and environmental data. As a result, AI can be especially useful when it comes to predictive modeling and can assist in assessing loss data and forecasting future risks. For instance, AI can help insurers analyze a client’s Internet of Things (IoT) data or claims history to provide insights on potential risk management challenges as well as the business’s overall risk appetite. This information could also be used to predict future concerns, allowing customers and get ahead of issues before they lead to significant losses.⁴ 

What is agentic AI?

Agentic AI represents a potential transformative leap in AI. Unlike traditional AI models that rely on user input for specific tasks, agentic AI systems are capable of analyzing data, identifying patterns, and executing tasks independently. These systems can adapt, learn from interactions, and even anticipate future needs, making them proactive problem-solvers. For insurance agents, this technology offers the potential to automate complex workflows, enhance human decision-making, and provide augmented, faster, and more accurate services to clients. By reducing inefficiencies, agents can focus on strategic, high-value activities, ultimately driving better outcomes for both insurers and policyholders. 

The benefits of AI for insurance agencies 

Implementing AI in insurance isn’t usually straightforward, and many insurance companies are concerned about the potential cybersecurity risks related to the use of AI. The technology needs to prove reliable and accurate, especially for high impact uses, and AI always requires expert human oversight. Still, as the world and technology continue to evolve, the benefits of AI for insurance are only becoming more apparent. Agency principals may benefit from AI’s foresight, using predictive modeling to navigate market dynamics. By visualizing potential scenarios, you can steer your agency with confidence, ensuring resilience and growth amidst uncertainty. This strategic advantage enables you to allocate resources efficiently and make informed decisions that align with your agency’s long-term goals. 

Additional benefits of using AI in agencies could include: 

• Empowered employees: AI is reshaping the roles of producers, customer service representatives (CSRs) and agency principals by amplifying their capabilities. Imagine AI as a personal strategist, a digital ally that augments intuition with data-driven insights. For producers, this means having a sophisticated AI assistant that sifts through complex data, highlighting trends and opportunities. It allows employees to anticipate client needs, positioning your business as a team of proactive advisors. This proactive approach not only helps in client retention but also in identifying potential markets for expansion. 
• Lower costs: With processes sped up, the cost to perform each task decreases. Plus, employee satisfaction increases when they can focus on less mundane tasks. 
• Optimized customer experience: Ultimately, customers can benefit from using AI in insurance because customer participation is streamlined and easier to understand and access. Happy customers lead to more engaged customers, and that trust is good for business. 
• Efficient data: Whether it is client information, policy information, loss records, risk assessment trends or actuarial figures, insurance professionals have a lot of data at their fingertips. However, for many organizations, this data may be stored in different systems or difficult to parse given its complexity. This can make it difficult to see the entire picture when interacting with clients and providing guidance. Through the use of AI tools and other technology, organizations can store all of their data in one location and leverage large language models to more efficiently analyze mission-critical information.³ 
• Decreased human errors: Historically, interactions between insurance professionals and clients have involved multiple stakeholders and manual data entry, creating opportunities for errors as information changes hands. Using AI can orchestrate a symphony of data integration, automatically populating client profiles with precision. This reduces errors and accelerates the process, allowing you to focus on relationship-building from the start. AI’s ability to verify data quickly also minimizes the risk of fraud, enhancing the integrity of your client base.³  

Embracing what’s next for AI

The business landscape is constantly evolving due to new technologies and approaches. As AI becomes more entrenched in everyday life across industries, it will become impossible to ignore. The insurance industry often functions very traditionally, but companies and their agents should be prepared to nimbly respond to tech changes if they want to keep up and stay successful. Claims, underwriting and processing, and other major insurance activities aren’t going away, but hopefully, engaging AI in insurance will help further optimize the industry’s processes, procedures, productivity and more. As with any technology, AI tools must be used in compliance with applicable laws and regulations and consistent with ethical, risk‑based practices. 

Balancing innovation with human insight and oversight

While AI offers transformative potential, it is crucial to balance innovation with human insight and oversight. AI systems require ethical oversight to ensure alignment with your agency’s values and client expectations, and users should exercise care that any data inputted into AI systems is appropriately secure and protected. By maintaining human oversight, you safeguard against biases and ensure AI-driven decisions are fair and equitable. This balance allows you to use AI’s capabilities while preserving the human touch that is essential in building lasting client relationships. 

As you embrace AI’s potential, you position your agency for a future where innovation and human insight coexist harmoniously. By leveraging AI’s capabilities in empowering people, revolutionizing processes and transforming technology, you can elevate client relationships and modernize your agency’s infrastructure. The future of insurance is in part AI-driven, and by using its power responsibly, you can lead your agency to new heights of success and innovation. Embrace this transformation and set the stage for a future where your agency thrives in an AI-enhanced world.