Insurers Combatting Industry Challenges with AI Investment in 2023

2022 was a tough year for insurers. Industry challenges – such as a looming recession – have culminated in more work than ever before, leaving insurers struggling to keep pace. Though these challenges will largely continue to shape the industry this year, insurers racing towards digitization are discovering a reprieve in artificial intelligence (AI) technology.

Ultimately, AI is helping leading insurers stay afloat in this difficult moment of business. With impactful solutions for fraud detection and claims automation to underwriting, AI is helping leading insurers maintain their share of customers and ensure profitability. In turn, insurers can expect to secure, not only their continued survival, but success amidst ongoing industry pressure.

State of the Insurance Industry

As aforementioned, the conditions of today’s industry are only culminating in more fraud, leaving already overburdened insurers struggling to keep up.

Perhaps the largest challenge the industry will face this year is the recession. With many already struggling financially, opportunistic individuals may attempt to boost their income via fraud schemes. Organized fraudsters will also see an opportunity to game the system as it becomes increasingly vulnerable. Afterall, we know times of economic uncertainty only lead to more fraud.

The level of sophistication in today’s schemes will also complicate matters, as fraud is becoming even more difficult to detect. For example, utilizing deep fake and AI generated images makes it extremely challenging to distinguish between real and forged documents.

With resources stretched thin, special investigations teams don’t have the capacity to continue to fight fraud with human effort alone. This is where AI technology becomes a must have.

The Importance of AI Investment in 2023

AI is minimizing the impact of industry challenges by supporting investigative efforts and eliminating the rote and manual work from insurers’ plates. With recommendations for autonomous claim payment and fraud avoidance, AI takes on the low value claims that are typically not cost efficient to review. This means insurers can tackle more fraud while being freed to focus on only the most complex claims and strategic tasks.

Furthermore, consumers are more price conscious than ever before and offering competitive pricing is critical to win customer loyalty during a recession. AI can be applied to assist insurers in properly identifying risk and pricing premiums. In turn, insurers will both improve their loss ratio while offering better pricing for their customers – ensuring greater customer retention.

It is indisputable that AI technology is helping Insurers face the growing workload. Though there is an instinct to feel apprehensive about automation, the right technology – i.e., explainable AI – offers transparency in all aspects of decision-making that makes it that much easier to accept. Insurers can also select a ratio of autonomy and human review that best fits their business needs and level of comfort.

Being an insurer in today’s environment is tough, but utilizing the right technology makes it all the more simple. With industry conditions generating increased pressure, we’re in a moment of time where AI is the only solution for the growing workload.

Insurers already leveraging AI automation are efficiently fighting fraud while better servicing genuine customers – paving the way to their success this year. With the bulk of the industry racing towards AI investment in 2023, many insurers will soon realize that same success.