The rapid integration of advanced technologies has taken over the insurance industry in recent years. In particular, artificial intelligence (AI) has played a prominent role in this transformation. The global AI in insurance market was valued at $2.74 billion in 2021 but is projected to reach $45.74 billion by 2031.
It’s clear that AI is growing in popularity across the entire industry. With insurance Business Process Outsourcing (BPO) specifically, this technology is having a significant impact by automating claims processing, improving customer service, detecting fraud, and managing risk.
While AI holds great promise for improving efficiency and streamlining operations, it comes with unique challenges. Between data privacy issues and the ethical considerations of relying on technology for decision-making, there is still a need for the human touch in insurance processes and workflows to ensure the best service for policyholders.
How AI is Transforming the Industry
AI can be applied widely across an insurer’s workflow to drive cost savings, improved efficiency, and better accuracy throughout all processes. It can power claims processing automation for faster resolution times and offer personalized customer support through chatbots. AI can also use advanced algorithms to detect fraud quickly and more accurately and use predictive analytics to perform accurate risk management.
The computing power and speed at which AI operates means it can handle highly technical and repetitive tasks with much better speed and accuracy than human workers. This means insurers can automate repetitive and time-intensive tasks that have typically burdened their internal team, freeing up their time for more strategic tasks that require critical thinking.
The Challenges of AI in Insurance BPO
It’s true, AI has the power to reshape the insurance industry as we know it. But it’s important to be aware of the limitations of this technology to understand why people power will remain a staple of how insurers operate now and in the future.
One of the main issues with relying on AI to guide decision-making and provide policy recommendations is referred to as the ‘black box problem,’ which can lead to ethical concerns. In other words, how the AI algorithms work and produce their results is largely a mystery, even to the most trained experts.
As a result, there is a possibility for bias in AI decision-making, which could overexpose insurers to certain risks, exclude groups of people from policy recommendations, and cause other issues. Instead, coupling AI recommendations with human involvement and oversight of more complex cases can result in more equitable and fair decisions.
There are also data privacy and security concerns with implementing AI across all processes. Insurers have access to a wide range of sensitive consumer data and information. Allowing AI programs to utilize this data could put consumers’ data at risk in the case of a data breach or hack. The right security measures and human oversight are needed to ensure that the use of AI is safe and secure.
The Future of AI in Insurance BPO
Without a doubt, AI use will continue to grow and become more widespread in insurance BPO. As its use cases continue to expand, insurers will be able to leverage this advanced technology to unlock further growth opportunities and meet the evolving needs of the modern marketplace.
The benefits that this technology provides are revolutionizing how insurers view the future of their operations. Even still, leveraging advanced technology like this cannot be done without the help of skilled human workers who can oversee the algorithm’s recommendations, see the nuance in insurance decision-making, and provide the human touch that policyholders are looking for.
Get the Best of Both Worlds with Covenir
Using AI to optimize workflows and uncover impressive efficiencies are some of the biggest reasons why the technology has become so popular in insurance BPO. When AI is implemented alongside human workers that provide their own unique expertise, insurers become more robust operationally.
At Covenir, we believe that insurers still need the right people to thrive in the modern insurance market. When you work with us, we seamlessly fit into your team to provide you with the people power and technology you need to provide a top-notch policyholder experience. Accurate, efficient, and 100% compliant — that’s Covenir.