The role of artificial intelligence has evolved over the years. Starting from smart chatbots that offer quick customer service to the wide array of machine learning technologies that boost up the power of any advanced business strategy, artificial intelligence has proved its worth in reimagining the growth and transformation of any industry. So quite obviously, AI applications have outperformed any other technology that was previously being integrated into the insurance industry. With increased resources and awareness about the game-changing influence of AI in the insurance industry, the initial hesitations and discomforts regarding its application are fading away quickly. Professionals and companies from the insurance industry have started acknowledging its calibre and the numerous opportunities that AI presents for insurers.
Since the past couple of years, artificial intelligence has shown its potential in the business verticals by rapidly innovating controlled and digitally enhanced automated environments for maximum business productivity. Particularly for the insurance sector, professionals can gain a lot by deploying AI-enhanced technology that can automate executive-level tasks and also enrich the service quality for the clients by making the right decisions and undisputable judgements. Reports have also found that AI can mitigate risks from silent cyber.
As cyber crimes have increased, so too have insurance claims. With the growing evolution of technology, insurance companies have noticed a rise in fake insurance claims. This condition has made the industry unsustainable for insurers to continue to pay out claims. Addressing this issue requires a closer assessment of the existing policies and the cyber-specific language within them, and AI applications might be the perfect tool to mitigate such risks. First, let's dive in deeper to understand what actually is 'silent cyber'.
Silent cyber is the term given to a situation in which cyber coverage is implied to be provided to an insured, without the knowledge of the insurer providing the coverage. In simpler words, a silent cyber situation strikes when a courts' findings are in favour of a policy owner because the policy does not clearly exclude cyber coverage.
The incidents of silent cyber surged during the Covid-19 period as ransomware incidents also proliferated. This uptrend in cyber-related insurance claims also raised the chances of cyber risks and exposure onto the insurers as they continue to pay out claims. This has also led to many insurers denying coverage in many cases, even in such situations where a policy did not explicitly cite any cyber coverage. It has also led to an increase in the number of premiums for cyber insurance.
To balance out this issue, regulators have issued guidelines to help manage such risks for insurance firms, but such initiatives have not been enough. Surveys have revealed that there is an inherent need for the use of advanced technologies that can bridge this glaring lack of explicit language that can refer to the cyberattacks in insurance policies.
Artificial intelligence and machine learning applications have completely changed the engagement in the insurance company. AI-powered solutions can penetrate the layers of confusion and direct clear value towards customers. AI has promised several advancements for the insurance company. Company leaders are deploying AI and machine learning tools in their underwriting process to collect thousands of data and assess the risks that the companies are likely to face in the future. AI tools can conduct cross-references to clear out any third-party data breaches. A coalition of such tools uses such large amounts of data to simulate attack vulnerability in real-time.
Besides, AI-driven tools can conduct touchless insurance claim processes to remove excessive human intervention, report the claim, capture damage, update the systems, and communicate with the customers all by themselves.
Companies that are early adopters of AI technology have already adopted automation to some aspects so that the claims can assess the significant time and cost of damage, and boost good service quality. The power of combining popular technologies like machine learning, IoT, analytics, and artificial intelligence will ensure that the insurers reach their prospective clients efficiently, and mitigate any risks of fraud or scams.
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