Generative AI for Insurance: How Insurers Are Using It

Generative AI burst into the mainstream in late 2022. Almost every market is now exploring how this technology will be applied in their sector—including property and casualty insurance. Though mainstream attention has largely focused on the text- and image-generating capabilities of Generative AI, this evolving technology can also improve business processes. To be successful, insurance providers should respond to the changing business landscape by understanding how Generative AI for insurance can reshape subscriber engagement.

What Is Generative AI?—a recap

Generative AI uses natural language processing driven by large language models (LLMs) to create text, images, music, video, code, audio, and simulations. Generative AI represents a landmark sea change in content creation. ChatGPT, a chatbot built on the Open AI GPT-3 language model, has been receiving most of the attention. Free and easy to use, ChatGPT thrills the masses as an everyday asset helpful with repetitive tasks and ideation. However, specialized solutions designed to solve specific business problems (as opposed to core technologies trained on generalized tasks) allow enterprises to leverage Generative AI for specialized use cases. As it relates to marketing, specialized Generative AI solutions for marketing can optimize messages to motivate consumers. The result can be increased engagement and revenue.

For example, the Persado Motivation AI Platform is an advanced Generative AI platform trained on 10+ years of enterprise language. It leverages language that motivates individuals to engage and act, for better messaging results. With AI-generated content that speaks to customers as if a brand knows them personally, insurers can see lift through every channel.

What are the key Generative AI for insurance use cases?

Generative AI inspires a variety of possibilities in the property and casualty insurance industry. When that Generative AI is also trained to tap into customer motivations, it can help consumers choose the best policy for their needs. The result is new levels of success for both the customer and insurer. Consider the following use cases: 

Customize quotes 

By using Generative AI to gather customer data, insurance companies could achieve a better understanding of their customers and with those insights offer insurance products that are more aligned to specific circumstances.

For example, a home insurance provider can implement Generative AI to make the data gathering and validation process faster and more efficient when pricing a home ownership policy. In a standard process, the insurance provider asks the customer about specific features of their home, and may send an adjuster out after the fact to validate higher-risk assets. Generative AI can help to automate that process by pulling data from real estate listings or other web-based information sources. The company delivers its custom insurance quote and worded to be clear but engaging for the customer. This process allows the insurer to offer a more personalized insurance product more efficiently. 

Speed up claims processing

By reading claims information, Generative AI trained for insurance could be part of a solution that identifies patterns and trends that can streamline the claims process, reducing claims payment time. For example, a Persado insurance client leveraged the Persado Motivation AI Platform to find the right words for its IVR prompt and steered customers to a self-service portal where they could resolve their issue. As the technology evolves, claims processing timelines could shrink to less than a day.

Create more targeted marketing content

The machine learning algorithms underlying Generative AI for insurance can generate marketing messages efficiently. That does not mean that these messages will be more effective at driving conversions. To accomplish that, a Generative AI would need to be purpose-trained to generate language that motivates customer actions—like Persado. For example, a property and casualty insurer doubled app downloads with an effective account activation email created by the Persado Motivational AI platform.

Other Uses for AI in the Insurance Sector

Expect the extensive adoption and integration of automation, deep learning, and external data ecosystems to explode in the property and casualty insurance sector. Below are a few of the most popular trends on the horizon:

Fraud Detection

Rule-based fraud detection systems need to be constantly updated, since criminals alter their scamming methods. With the advent of AI and machine learning systems, insurers can increase the accuracy of fraud detection and reduce the number of false positives.

One way that Generative AI can help with insurance fraud detection is through the generation of synthetic data. This can help train algorithms to detect anomalous behavior. Experts say that synthetic data records are as much as 10% better than real data for training fraud detection algorithms.

Upsell support

Using CRM data, next best offer models support insurance agents in upselling and cross-selling activities. The accuracy and timing of these personalized product recommendations increase significantly using predictive machine learning models. Here too, having an abundance of quality data remains a mission-critical ingredient for the best outcomes from the intelligence prediction models, along with data privacy law compliance.

Keep in mind that the success of upselling and cross-selling is not just about the quality of the offer. It’s  also about the quality of the language used to make the offer. Persado consistently sees brands invest significant time and resources in fine-tuning their offer and then ignore the message. Insurance brands that leverage Generative AI like the Persado Motivation AI see increased impact.

Underwriting automation

Time intensive and prone to errors, manual underwriting can lead to inefficient pricing. Generative AI for insurance can cut the time and effort. Typically, AI and machine learning systems assist underwriters by providing actionable insights derived from risk predictions.

Underwriters can automate data collection, data extraction, form-filling, and other repetitive tasks. Using machine learning models and other analytical techniques, underwriters can deepen their understanding of the risk associated with a client’s profile.

In the not so distant future, an insurance purchase will take minutes with less human involvement. With AI algorithms creating risk profiles, cycle times for completing the purchase of an auto, commercial, or life policy will be reduced to minutes or even seconds

Payment reminders

Applying specialized Generative AI like Persado to uncover motivational language allows insurers to successfully promote services like autopay and self-service payments. Leveraging what we call  Motivational AI technology, insurers can send reminders to policyholders about the importance of making on-time payments to ensure a lapse never occurs in their coverage. A Persado auto insurer client used an IVR script to encourage customers to get up to date on policies that had lapsed due to nonpayment. The campaign resulted in a 16% increase in payments.

Contact center support

With Generative AI for insurance, the potential to revolutionize the contact center experience for policyholders remains enormous. Language models can improve conversations by automating pre-call, in-call, and post-call activities like after-call documentation, agent coaching, and summarization. 

Tailored, personalized responses elevate customer support conversations to a new level.  Contact center agents respond more quickly and accurately to inquiries using Generative AI models to procure the best answers automatically. This technology also helps reduce the need for manual data entry. Gartner analysts predict that the contact center industry will likely save as much as $80 billion by 2026 by employing more AI chatbots throughout the customer service journey.

Embracing the opportunity of Generative AI for insurance today

As Generative AI for insurance becomes more prevalent, carriers need to build employee skills, embrace these emerging technologies, and create an open culture and perspective required to achieve better results.

McKinsey offers these 3 suggestions:

  1. Develop a road map of AI-based pilot programs and POCs
  2. Determine which parts of the organization require investments in skill building or change management 
  3. Create a detailed schedule of milestones that address shifts in the evolution of Generative AI and significant changes or disruptions within the industry

The insurance industry is heading into a new era as every organization implements AI differently. However, many casualty and property insurers will benefit from what Generative AI offers right now.

Persado insurance clients use Motivation AI to identify the language that will lead to more policies, less churn, and on-time payments. Learn more about the possibilities of Generative AI for insurance. Contact Persado.

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