We’ve all been hearing a lot about artificial intelligence over the past few years. Much of this discussion concerns AI-generated imagery and its implications for art, entertainment and news. We sometimes fail to notice how the technology is already at work in some more less glamorous areas, including the insurance industry.
Electronic adjusters
According to a recent news article, insurance companies are increasingly turning to AI when it comes time to figure out whether to pay a claim, or how much to pay. Using various AI-based services, insurers can input some of the details of a case and have the service compare them to similar cases. In this way, they can quickly estimate the going rate for payment. In some states, insurance companies now use these services to analyze the vast majority of their claims.
For example if a policyholder is injured in an accident caused by a drunk driver, an AI service can review similar cases and sort the results by the geographic region, the court jurisdiction, the type of vehicles involved and other factors one might expect. But they can quickly go beyond those factors to look at the claimant’s income, their need for ongoing medical treatment and so on. They can even review decisions by local judges to predict how a court might decide in a particular case.
AI services can also comb through the personal history of a claimant to find information about any previous history they may have with the court system and/or insurance claims.
Lower payouts
To be clear, much of this work is not new. The insurance industry has long used human beings to do this kind of research. In some ways, these AI services simply serve to make an insurance adjuster’s job a little easier.
However, no one should be surprised to learn that insurance companies have another motivation for using AI tools. Observers say that when insurance providers use AI to analyze claims, their payouts are consistently lower than when they rely on human research. After all, a human may care about the impact an injury has on a victim and their family. A piece of software doesn’t.
As a result, when policyholders file a claim today, there’s a good chance that it’s being analyzed by AI. There’s also a good chance that the insurance company will end up offering them a payment that’s less than what they deserve.
