The COVID-19 pandemic has caused upheaval in virtually every corner of the business world. However, the insurance industry -- particularly the P&C insurance sector -- has been among the hardest hit.
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With that in mind, below are a few ways in which P&C insurers are using AI to help them manage the ongoing COVID-19 economic crisis and to position themselves for future success as well.
Digital Transformation and Profit Margin Management
From decreasing premium levels to rebate perks for new policy holders, profit margins have been stretched incredibly thin as a result of the COVID-19 pandemic. In turn, P&C insurers have had to take drastic measures — including reducing team size and cutting internal investment — as a way to stretch their operating budgets as much as possible. As a result, insurers need to find ways to amplify their digital transformation efforts as a way to streamline their operations as much as possible. And investing in AI tools could be a way to do so. Granted, budgets may be tight, however, by investing in AI optimization tools now, P&C insurers will not only be able to better manage the current market but have a potential edge on competitors once circumstances normalize. Furthermore, by making their operations more agile and informed, insurers will be able to empower current and returning workforces more than ever before.
Navigating Recovery
For as hectic as it has been for P&C insurers during the COVID crisis, the “post-peak” period — whereby regions begin to see varying levels of case reduction and recovery — could prove to be even more challenging. Data will be key in helping P&C insurers get a better understanding of how each region is recovering and will be instrumental in allowing insurers to monitor factors such as consumer confidence, digital versus in-person customer activity, and more.
And given the amount of fluctuation that is set to take place as the world recovers, adopting sophisticated data tools such as AI will be pivotal in helping P&C insurers deliver the personalized service that customers need. Additionally, it will also enable them to more easily adapt to evolving customer experience demands and allow them to be better prepared for any future periods of disruption as well.
Early Adoption Success
AI in P&C insurance is not a completely far flung idea. In fact, some P&C insurers have already been deploying AI and to good effect — especially when coping with concerns stemming from the pandemic.
One key area in which AI is reaping significant rewards for P&C insurers is real-time speech and text analysis — which has helped understaffed call centers cope with the influx of inquiries they are facing. For example, by using AI technology, P&C insurers can extract unstructured data collected by monitoring customer interactions, and then use this data to identify patterns, predict next steps and automate simple tasks.
Additionally, P&C insurers are also having tremendous success in digitizing document processing, allowing machines to handle simple processing tasks that can reduce the burden on human employees and help to promote social distancing.
P&C insurance has faced unprecedented challenges as a result of the COVID-19 pandemic. However, by adopting AI tools, P&C insurers will not only be able to better navigate the current market but will be able to build more agile and forward-thinking infrastructures to tackle the post-pandemic market as well.
