Fraud isn’t the only misinformation problem in insurance. Unintentional misinformation is not only more pervasive but also less discussed. This misinformation occurs during underwriting and quoting and can lead to inadequate or incorrect coverage and policy pricing. Fortunately, AI offers a solution to mitigate these errors, enhancing outcomes for insurers, agents, and policyholders.
Unintentional misinformation arises from various sources: clients providing incorrect data due to misunderstanding the questions, agents failing to ask comprehensive questions, or relying on incomplete online data. This misinformation can cause insurers to underestimate coverage or misprice policies, resulting in unexpected losses, business vulnerabilities, and client dissatisfaction.
AI can significantly reduce unintentional misinformation by efficiently scanning numerous structured and unstructured data sources, providing a more comprehensive risk profile. Here are five AI capabilities that can enhance quoting and underwriting:
- Autonomous AI Assistants: These digital co-workers can assume specific roles, such as risk assessment or premium audit aides, delivering accurate responses to risk questions and adapting to tasks.
- Data Validation and Enhancement: AI solutions cross-reference internal and external data sources to validate information, identifying inconsistencies and flagging discrepancies for further investigation.
- Large Language Models (LLMs): LLMs analyze unstructured data from application forms or policy documents, extracting relevant information and minimizing the risk of misinterpretation.
- Predictive Analytics: AI analyzes historical data and trends to anticipate future risks, enabling insurers to accurately adjust underwriting strategies and pricing models.
- Continuous Learning and Adaptation: AI solutions refine their algorithms through real-time feedback, enhancing predictive capabilities and mitigating misinformation.
Agents can integrate AI by partnering with insurers using these technologies or by adopting AI tools within their agencies. Working with AI-enabled insurers allows agents to provide faster, more tailored coverage. Internally, AI tools can transform agency distribution partners from data collectors to trusted advisers, enabling more productive discussions about business policyholders’ unique risks and coverage requirements.
Identifying manual processes ripe for intelligent automation is key for agencies looking to initiate AI functionality. Solutions should be customizable to meet specific needs, and vendor partnerships should facilitate feedback and continuous improvement.
Unintentional misinformation can damage relationships between insurers, agents, and policyholders. By leveraging AI internally and through partnerships with AI-empowered insurers, agents can reduce misinformation, enhance customer experiences, and provide accurate, adequate coverage. AI is not just a tool but a transformative technology that can elevate the entire insurance process.
For more information on the challenges of unintentional misinformation and how AI solutions can help solve them, check out this article from NeuralMetrics in Independent Agent Magazine.