A research report published last week found that one-third of claimants were not fully satisfied with their most recent insurance claims experience, adding that speed of settlement is a clear pain point for policyholders.
Translating the level of dissatisfaction into an eye-opening dollar figure, Accenture said $170 billion in premiums are at risk over the next five years as these customers may switch carriers as a result of unsatisfactory claims experiences.
The report, “Why AI in Insurance Claims and Underwriting,” draws insurers’ attention to the benefits of artificial intelligence, which the report authors describe as transformative technology. Noting the aging of the insurance workforce is happening at the same time as advances in AI, they assert that the time is now for insurers to invest in AI capabilities—stressing, however, that AI should be used “responsibly, in tandem with humans.”
“AI has matured and costs have come down significantly over the past five years, delivering ever-increasing value for insurers,” the Accenture researchers state.
The study offer perspectives of customers, claims adjusters and underwriters. For the customer piece of the report, Accenture surveyed 6,784 home and auto insurance customers, across 25 countries, who had made a claim during the past two years.
A chart in the report illustrates rising levels of dissatisfaction as the time to settle increases. While just 17 percent of those whose claims were wrapped up within two days were dissatisfied with the speed of claims handling, once the duration went beyond a week, the dissatisfaction percentages rose to 31 percent and higher (reaching 39 percent for three months or more).
“AI solutions can improve settlement time by enabling digital and self-service claims processing that dramatically enhance customer experience and accelerate processing,” the report says, noting that “many leading insurers have invested heavily into this aspect, creating omni-channel environments that leverage the use of chat bots, rich text messaging, [and] guided scripting for agents.”
Accenture also surveyed 128 claims executives in 13 countries, and 434 U.S.-based underwriters for other sections of the report. AI use cases presented in the report come from both the life and property/casualty segments, but the report does not indicate the distribution of respondents by sector.
Querying the claims executives, Accenture reports that 44 percent said that their organizations are actually advanced in use of automation, AI and machine learning-based data analytics. Sixty-five percent said they plan to invest more than $10 million into AI in the next three years, with 80 percent saying the technologies can bring more value than they do today.
From the underwriters, ranging from entry level to executive/senior management, Accenture learned that they spend 40 percent of their time on non-core and administrative activities. Attaching a dollar-value to the efficiency loss, Accenture estimates high percentage of non-core work represents somewhere in the range of $85-$160 billion over the next five years.
“Incorporating AI and automation into the underwriting workflow is a prime opportunity to reduce time spent on administrative tasks, manual processes, and redundant data inputs,” the report says. Describing an “intelligent underwriting solution” as one that includes submission ingestion, data enrichment, triage, appetite fit and propensity-to-bind scoring, the report notes that this kind of AI allows underwriters to focus time on core activities like risk evaluations of submissions, which are most likely to drive (profitable) bound premium.