ChatGPT: Generative AI Powered Insurance Brokerage is Now Serving the Insured

August 2, 2023

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Modern Life, a tech-forward life insurance brokerage, has announced the introduction of its generative AI product, specifically designed to cater to the needs of life insurance advisors.

The AI tool, developed in partnership with OpenAI and Pinecone, is built on proprietary life insurance research and data, aiming to simplify complex insurance topics, enhance underwriting accuracy, stimulate innovative sales ideas, assist in creating marketing content, and facilitate client communications.

ModernLife's Licensed OpenAI powered tool for insurance advisors

The chat-based product has passed the life insurance licensing exam, demonstrating a comprehensive understanding of complex insurance concepts and requirements. The AI tool provides life insurance-specific responses, offering advisors instant access to crucial information, thereby enabling them to deliver exceptional service to their clients.

The AI product also allows advisors to research and synthesize complex topics, review advanced planning strategies, and draft client communications. It can generate marketing materials and prospecting emails, create life insurance-centric content for blogs, articles, email, or social media, and conduct field underwriting. By entering a health issue or illness, advisors can gain in-depth knowledge about the condition, formulate follow-up questions, and understand treatments and medications to aid underwriting conversations with clients.

Modern Life's new offering is seen as a natural complement to their existing brokerage platform, aiming to set a new industry standard and catalyze a paradigm shift in how advisors use technology.

MarketsandMarkets welcomes this development, and we take a look at the details.

What is the Role of Generative AI in Insurance

    The Transformative Power of Generative AI in Insurance

    AI in insurance is not just a buzzword; it's a powerful tool that can significantly enhance efficiency, accuracy, and customer experience in the insurance industry.

    According to a report by the National Association of Insurance Commissioners (NAIC), the insurance industry in the United States is a $1.2 trillion sector. With such a vast industry, the potential for AI is enormous. Let's delve into some of the ways Generative AI is reshaping the insurance landscape.

    • Automating Underwriting: Underwriting, traditionally a labor-intensive process, is ripe for disruption. Generative AI can analyze a multitude of data points, from medical records to financial history, to assess risk and determine appropriate premiums. According to a study by Deloitte, AI can reduce the underwriting process time by up to 70%, significantly enhancing efficiency and reducing human error.
    • Personalizing Policies: The era of one-size-fits-all insurance policies is fading. Today's consumers demand personalized experiences, and Generative AI is the key to delivering this. By analyzing customer data, AI can create tailored insurance policies that cater to individual needs. A recent survey by Accenture revealed that 80% of insurance customers are likely to switch to a provider that offers personalized experiences, underscoring the importance of this approach.

    The Future of Insurance with Generative AI

    As we move further and start to look beyond 2023, Influence of Generative AI in the insurance industry is set to grow even more.

    • Claims Processing: AI can revolutionize the claims process, making it faster and more efficient. It can assess damage in photos or videos, cross-reference claims information with policy details, and even detect fraudulent claims. The FBI estimates that the total cost of insurance fraud (excluding health insurance) is more than $40 billion per year. AI's ability to detect fraudulent claims could significantly reduce this figure.
    • Customer Service: AI chatbots are redefining customer service in the insurance industry. They can handle customer queries 24/7, providing instant responses and freeing up human agents to handle more complex issues. Gartner predicts that by 2025, customer service will be handled by AI bots in 80% of interactions.
    • Risk Assessment: Generative AI can analyze vast amounts of data to identify patterns and trends, helping insurers to better understand and predict risks. This predictive capability can lead to more accurate pricing and better risk management.
    • Marketing and Sales: AI can analyze customer behavior and preferences to create targeted marketing campaigns and sales strategies. It can also generate content for blogs, articles, emails, or social media to engage potential customers. According to a report by McKinsey, companies that leverage AI in their marketing strategies can expect up to a 20% increase in sales.

    In the case of Modern Life's generative AI product, it's used to demystify complex insurance topics, enhance underwriting precision, stimulate fresh sales concepts, facilitate the creation of marketing content, aid client communications, and much more for advisors. It also allows advisors to research and synthesize complex topics, review advanced planning strategies, and draft client communications.

Which Insurance Products Can Benefit from Generative AI

Generative AI is revolutionizing the insurance industry, bringing transformative changes to various insurance products. From automating complex processes to personalizing policies and enhancing customer service, AI's capabilities are reshaping life, health, auto, and property insurance. Let's delve into how these insurance products are benefiting from the integration of generative AI.

  1. Life Insurance: Generative AI can significantly enhance life insurance products by automating the underwriting process, which often involves analyzing complex medical and personal data to assess risk. It can also help in personalizing policies based on individual health conditions, lifestyle, and financial goals. AI can assist in predicting life expectancy more accurately, thereby determining appropriate premiums. Furthermore, AI chatbots can provide instant responses to customer queries, improving customer service and engagement.
  2. Health Insurance: In health insurance, generative AI can be used to analyze vast amounts of health data to predict potential health risks and diseases. This can help insurers to offer more personalized and preventive health plans. AI can also automate the claims process, making it faster and more efficient. It can assess medical reports, cross-reference claims information with policy details, and even detect fraudulent claims. AI-driven customer service can also guide customers in choosing the right health plan and understanding policy details.
  3. Auto Insurance: Generative AI can revolutionize auto insurance by automating the claims process. AI can assess damage in photos or videos submitted by policyholders, estimate repair costs, and speed up claim settlements. It can also analyze driving behavior data to assess risk and determine premiums, leading to more personalized policies. AI can also be used to detect fraudulent claims, saving insurers significant amounts of money.
  4. Property Insurance: Generative AI can be used to assess property values and risks more accurately such as property location, construction materials, and local weather patterns. This can lead to more accurate pricing of policies. AI can also automate the claims process in case of property damage, analyzing photos or videos of damage, estimating repair costs, and speeding up claim settlements. AI-driven customer service can assist customers in understanding their policies and handling claims.

AI-Powered Insurance Products in 2023

In 2023, the insurance industry has seen a surge in the integration of AI technologies, with companies launching innovative AI-powered products to streamline processes and improve customer experience.

Simplifai InsuranceGPT: Simplifai, an AI automation solutions provider, has launched the world's first custom-built GPT tool specifically for insurers. This tool, named Simplifai InsuranceGPT, leverages the company's no-code AI-powered platform to enhance communication between insurers and their customers. It provides fast, concise, and accurate responses while maintaining privacy and data security. The tool is trained specifically on information directly relevant to the insurance sector, making it a unique offering in the market.

Clara Analytics for Amazon: Amazon has selected Clara Analytics, a leading provider of AI technology in the commercial insurance industry, to improve health and claim outcomes for their corporate workers' compensation claims. Clara's AI platform uses advanced machine learning to deliver insights that help claims adjusters guide casualty insurance claims toward optimal outcomes. The platform includes modules that use the latest in generative AI and machine learning technologies to provide AI insights that detect claims at risk of escalation and identify the best path toward resolving claims involving injuries.

These advancements signify the growing role of AI in reshaping the insurance industry, offering more efficient, accurate, and customer-centric solutions.

Can AI Write an Insurance Policy?

AI is being increasingly used in the insurance industry to write policies, streamline processes, and improve customer experience. Here are some examples:

  • Streamlining Insurance Processes: AI helps insurers find evidence of potentially fraudulent claims and speeds up the underwriting process. AI can do these tasks faster and more cost-effectively than human employees by training models with historical data and using the models to automatically process new customers and claims.
  • Reducing Biases: Rates for car insurance are traditionally determined by a buyer's personal factors such as credit score, income, education level, occupation, and marital and homeowner status. Companies using AI to build models can reduce these biases by actively excluding these factors during the training process.
  • Flexible Insurance Options: Insurers can track the habits of drivers for organizations like Uber and Lyft with wearable technology. If drivers for a service demonstrate safer driving habits, insurers can then offer that service lower premiums. Devices can also be used to activate insurance coverage only when drivers are actually driving, cutting costs while insuring service workers who would otherwise have had to purchase their own policies.
  • Promoting Safer Driving Habits: If a delivery company that insures its drivers is experiencing a spike in accidents or traffic mishaps, AI and machine learning systems can crunch the data collected by connected devices to recognize patterns that would explain the reason for the accidents. Based on that analysis, the insurer can make recommendations to the company that would help reduce the number of accidents and expensive claims.
  • Claims Processing: Companies like CCC Intelligent Solutions digitize and automate the entire claims process with AI. Photos submitted from accident sites undergo analyses by AI technology and insurer-approved rules. Based on this data, CCC's AI is able to assess damages and provide timely estimates for insurers to approve and send to their customers for confirmation.
  • Assessing Vehicle Damage: Liberty Mutual, through its initiative Solaria Labs, has developed an AI tool called Auto Damage Estimator. By conducting comparative analyses of anonymous claims photos, this AI tool is able to quickly assess vehicle damage and provide repair estimates post-accident.

These examples illustrate how AI is being used to write insurance policies, streamline processes, and improve the overall customer experience in the insurance industry.

How Do Insurance Companies Use AI to Mitigate Risk?

Insurance companies are increasingly using AI to mitigate risk in several ways:

  • Fairness and Transparency: AI can identify and eliminate potential decision-making disparities due to race, gender, age, or ethnicity, creating a more equitable system. It also provides better visibility into the underwriting process, ensuring policies are fair and adhere to best practice standards.
  • Data-Driven Insights: AI enables insurers to gain deeper insight into their customer base by analyzing large volumes of data such as customer demographics and preferences. This helps companies identify trends in risk profiles and develop tailored solutions for each customer.
  • Near Misses: AI can detect fraud early on or predict potential problems before they become significant. This helps companies create more accurate policies and better manage their risks. AI-driven systems can automatically process customer applications and identify key risk indicators that may be overlooked in a manual process.
  • Risk Mitigation: AI is crucial in helping insurers identify and mitigate risks. AI-driven systems can analyze massive amounts of data to help insurers understand the potential outcomes of different scenarios, allowing them to make better decisions and reduce losses. Insurers can also use AI-driven risk management information systems integrated with their existing systems to quickly and accurately detect risks such as fraud or credit default.
  • Fair Pricing and Access: With AI, insurers can automatically assess risk profiles and set prices according to customer needs. This helps create a more equitable system by removing any conscious or unconscious biases that may exist. AI can also make it faster and simpler for customers to find the policy that best fits their needs by streamlining the underwriting process.


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