Potentially, artificial intelligence can reshape the insurance industry. From claims processing and improved application management to delivering on-demand solutions and providing enhanced advisory services, its impact can be far-reaching.But within the opportunities, potential challenges around risk and compliance must be kept in mind.
‘This section protects data subjects from being subjected to a decision which is based solely on automated decision-making, which results in legal consequences for the data subject and the data subject being profiled. For instance, an AI system would have the ability to profile customers seeking a bank loan, and determine their creditworthiness based on previous loan repayments, income, indebtedness etc.
In doing so, consumer confidence in the usage of AI in insurance will increase. Insurers will also better manage the complexities of the regulatory environment as they know exactly what is required from an implementation perspective. Even though AI can be considered to be in the preliminary stages when it comes to insurance, this also provides significant impetus to scrutinise the technology and understand the business use cases for incorporating it into existing systems.
Furthermore, automation and AI can cut down on fraud. Algorithms can be put in place to identify fraudulent claims. This not only saves the insurer money, but also creates a smoother underwriting experience for customers as well.