Name: How AI Is Changing The Insurance Industry - Insurance Trends
Uploaded: 2025-08-21T06:18:31.000Z
Duration: 4 min 27 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

In an industry built on data, like insurance, it's no surprise that the rise of AI-powered tools will have drastic implications.

Adverbs of manner

But what, specifically, are the biggest likely impacts of AI on insurance?

Well, for one, AI will help insurers improve accuracy in risk assessment.

Insurance, ultimately, is all about recognizing patterns of risks and predicting their likelihood to occur in the future.

The more accurately an insurer interprets and analyzes risks, the better they can price that risk.

In other words, they can set the policy premiums based on the likely policy costs, covering both claim payouts and other costs.

Machine learning is a major lever for helping insurers continuously improve their risk models.

Insurers have long chased after the underlying predictors of risk.

Data about who you are, what you do, and what you own are like clues to the puzzle.

AI is simply supercharging this, helping make sense of an even longer tale of factors.

Many people have heard that red cars are more expensive to insure.

Actually, that's a total myth, but it's very much in the spirit of the type of pattern finding AI can help with.

For example, insure-tech providers like Relativity6 use AI tools to help insurers get a better profile on businesses they insure.

By scanning data from sources like company websites, news reports, and customer reviews, they can produce a very granular assessment of risks.

Say, a scan of a restaurant's menu reveals several flambéed dishes.

All of this helps the insurer decide if they want to insure that customer, called risk selection, and if they do, to set the right price.

Another way AI can improve accuracy, in addition to risk assessment, is loss assessment, which happens during the claims process.

AI can quickly make an initial assessment of damages, say by using image recognition tools.

A photo-estimatic assessment can help the insurer set aside just the right amount of reserves and avoid setting aside too much, a poor use of capital.

Another benefit of photo-estimatics is that it can help the insurer identify claims that may benefit from proactive intervention.

Say, after the accident, the insurer hasn't been notified of any passenger or driver injuries, but the pictures suggest a high likelihood of internal bodily damage.

The best action may be for the insurer to proactively coordinate medical treatment rather than waiting around to receive bills afterward.

Aside from improving accuracy, another important application of AI is making sure claims are genuine, claims validation.

Fraudulent claims cost insurers billions of dollars every year.

But insurers can't investigate every claim in exhaustive detail.

The cost would be prohibitive, and it would delay payouts on genuine claims.

So, many turn to technology companies for assistance.

One provider is Shift, whose AI-powered solution detects fraud by analyzing claims across many different insurers.

For example, a criminal group submitting fraudulent auto insurance claims might be hard to detect by any one insurer, but by aggregating shareable, say anonymized, claims data from many different insurers, they can better spot patterns of suspicious behavior.

A final application of AI is one common to almost all sectors – using AI to automate tasks, boosting productivity and reducing overhead costs.

Increasingly, customers can simply speak with an agent – human or even possibly AI-based – and skip filling out forms.

AI tools can process information from the conversation directly.

Claims processing and new policy pricing can be streamlined in this way.

Of course, AI can be applied to a wide range of tasks – for example, the generation of initial drafts of coverage letters, which can then be reviewed by a human and sent to the customer.

Subtitles ListPlay Video

How AI Is Changing The Insurance Industry - Insurance Trends

process

recognize

reveal

boost