AI Removes Guesswork in An Uncertain World Posted on : Sep 12 - 2020

It’s been a tumultuous year. In just the span of a few weeks, COVID-19 emerged unexpectedly and abruptly altered almost every corner of the commercial insurance space. Stock market and GDP forecasts have whipsawed as economists and investors have tried to make sense of frequently shifting news. And now, we’re headed straight into what is likely to be a contentious and unpredictable election cycle.

Divining the future is always a challenge, but lately, it’s become especially difficult. During periods of intense change, traditional patterns and precedents lose their predictive power. Regression style tools that provide data extrapolations become a useless blur. Take the insurance industry, for example, the average workers comp claim duration of 2019 will look very different than it is in 2020. Litigation and fraud may emerge in new forms, with most new types passing undetected by screens developed from prior period data.

One approach that can help companies navigate the uncertainty is artificial intelligence (AI), which is highly sensitive to new data and tends to react immediately, creating a dynamically updated vision of the future. While much of the world has been focused on the pandemic and the related economic challenges, the underlying technologies behind AI have continued to accelerate in speed, efficiency, and predictive accuracy. Integrating machine learning, natural language processing, and other AI techniques into organizations’ operations is helping companies become more resilient.

While the promise of AI is great, so too is the hype. As a result, many people have a misconception of what AI actually is — and what it is not. Let’s take a look at how it really functions, what it can and cannot do, and how it can help future-proof commercial insurance.

Two Types

AI is typically viewed in two fundamentally different ways. There is the futuristic “AI-is-taking-over” version (think Skynet or similar concepts brought to life by Hollywood). This form understandably makes people a little nervous that machines will grow to dominate society (or at least replace jobs at a time when we’re already seeing unemployment lines expand).

Then there is a more prosaic version in which AI complements what humans do. Think of how Google automatically surfaces structured answers to questions you type in or how Amazon knows which product you might want to buy next. In these cases, AI extends your capabilities while leaving you in the driver’s seat. It is this more practical version that will get organizations and teams excited about modern AI-based applications and is the game changing application in the commercial insurance space.

AI that augments human capability is especially valuable in businesses like insurance, where there is simply too much data coming in quickly for people to keep up. Image and language processing can be applied to the dozens of structured documents typically associated with a claim but can also be used to interpret unstructured information, such as handwritten doctor’s notes. View More