Generative AI’s Effects on Insurance Claims

Generative AI’s Effects on Insurance Claims

Generative Artificial Intelligence (AI) has begun to transition from innovation into a useful tool in many different fields, particularly the insurance industry. To illustrate this point, the statistics in a recent study show that as of the end of 2023, half of the insurers will have tested generative AI solutions within excess of 25% planning to solidify a solution by the end of this year.

Generative AI is a perfect solution for claims administration due to the need to streamline workflows that are defined in terms of their:

  • volume of work
  • repetition
  • reliance on manual processes

This new technology can help to reduce the administrative costs and let the adjusters spend more time in front of their clients and claimants with positive effects on patient outcomes. 

According to Ernst & Young, 50% of the insurers surveyed from June 2022 to June 2023 stated that improving claims efficiency is a priority for the near term. As the technology continues to improve, Generative AI’s most logical impact is to use its ability for natural language processing to speed the process of summarizing claims documents, including key medical information, and to uncover trends or insights that may not be obvious to claims adjusters at first read. 

In addition, these systems are automating some simple and clear:

  • medical-only claims
  • liability property damage-only claims
  • first-party auto damage claims
  • property claims

There is a learning aspect to these systems so that they can utilize predictive decision making to “learn” from past claims and identify patterns that allows them to autonomously process some claims based on certain predefined criteria. 

Predictive Analytics 
Generative AI can also be deployed to assist insurers with pricing models using their predictive analytics to develop a better understanding of the factors that will affect the client’s overall risk profiles. These risk management models are particularly useful in the Workers’ Compensation markets. They are helping with return-to-work analysis as well as physical demand requirements and pain levels that will help to provide a better claim result. 

There is roughly $307B of insurance fraud every year. Leveraging the information found in historical claims data, Generative AI can help to identify patterns and highlight outliers which can kick off fraud investigations. 

Not a Replacement
As Generative AI continues to become more advanced; it is important to take the right steps in using this generative AI to your advantage. One aspect that needs to be considered is building in ethical and responsible uses for AI and making sure it works for the benefit of the claimant’s welfare. 

It is important to note that while the machine can take on some mundane tasks, there is no substitution for the human element. AI can make a claim professional’s job easier, but it will never be a complete substitution for the human touch. Reach out to TSIB today and speak with one of our Risk Advisors regarding how we can analyze your claims.  

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