Up to $170bn of insurance premiums could be at risk in the next five years due to poor claims experiences, research from Accenture has revealed.
The report titled, “Why AI in Insurance Claims and Underwriting?”, is based on surveys of more than 6,700 policyholders across 25 countries; more than 120 claims executives in 12 countries; and more than 900 US-based underwriters.
It explores how the insurance industry is responding to the latest market dynamics and challenges, as well as how artificial intelligence (AI) technologies can be applied to satisfy and retain customers and transform the underwriting function.
Among the key findings were that one-third (31%) of the claimants were not fully satisfied with their home and auto insurance claims-handling experiences over the past two years. Of this 31%, six in ten (60%) cited settlement speed issues and 45% cited issues with the closing process.
Accenture said dissatisfaction around the claims experience is a key reason driving customers to switch insurers.
Nearly one-third (30%) of dissatisfied claimants said they had switched carriers in the past two years, and another 47% said they were considering doing so.
Importantly, Accenture highlighted that the consumers who reported not being fully satisfied could represent up to $34bn in premiums annually, or up to $170bn over the next five years.
AI technologies could improve the claims process as well as reduce underwriting operating costs for insurers, Accenture said. Adoption of these is slow, but this is changing, the company added.
Kenneth Saldanha, who leads Accenture’s Insurance industry group globally, said, “AI is no longer a technology of the future, but an established capability that many insurance innovators are already putting to work to deliver better customer experiences and empower their workforce.
“As humans and AI collaborate ever more closely in insurance, companies will be able to reshape how they operate, becoming more efficient, fluid and adaptive. Those that are already moving to leverage AI will be able to create sustained competitive advantage.”
Reserv, a third party administrator (TPA) that is looking to reinvent insurance claims, recently exited stealth with $8m in seed funding.
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