It’s crunch time for P&C. Investment yields are declining while combined ratios are holding up in the 97% range. This has P&C insurers wondering: “What can we change in our operations to improve our economics?”
Conclusive answers are now coming from the field of cognitive technology, the variety of artificial intelligence that deals with knowledge and textual information.
In this post series, I want to share three areas where cognitive is delivering unprecedented productivity gains and insight, and leading to deep changes in how P&C insurers do business.
Why cognitive technology is a great match for P&C
P&C insurance is particularly people- and paperwork-intensive. Both underwriting and claims management revolve around the production or retrieval of information from documents – a policy or a claim package - that capture the specifics of the insured’s case. These are particularly time-consuming tasks that up to now have entirely fallen into the lap of human operators and typically represent 20% of the combined ratio.
What cognitive technology brings to this picture is its ability to read documents much in the same way humans do, in a fraction of the time. It automatically harvests a case’s characteristic pieces of information and reasons on them. This reduces the time operators need to spend on such tasks from hours to seconds. As a result, insurance professionals can focus on the highest-value areas of their jobs, such as decision-making, rather than the more time-consuming, menial tasks. And it takes significantly less time to service a case.
See also: P&C Insurers: Come Out of the Dark Ages
As a first example, let’s look at how this plays out in claims.
Accelerate Claims
- Automate claim routing
- Summarize key claim characteristics
- Suggest claim valuation
- Focus claim handlers on high value activities
- Consistently grade risk and flag exposure
- Accelerate quotes
- Optimize risk engineers’ time