Generative artificial intelligence represents a category of AI that utilizes generative models to produce text, images, or other forms of media. These models grasp the intricacies and structure of their input training data, enabling them to generate new data with similar characteristics. In insurance, generative AI plays a pivotal role in expediting digitization processes.
IFRS 17, an International Financial Reporting Standard promulgated by the International Accounting Standards Board, supersedes IFRS 4 regarding insurance contract accounting. Its effective date is January 1, 2023. IFRS 17 introduces a comprehensive revamp of the treatment of insurance contracts, entailing novel prerequisites for data, systems, and procedures that impact various departments within the organization, such as Investment, Actuarial, Accounting, Finance, and IT.
The insurance industry is quickly moving into a digital-first future where emerging technologies will reshape the way policies are sold, claims are processed, and risks are managed, and where market leaders are automating critical workflows to deliver seamless experiences, enhance customer satisfaction, and unlock profitability.
The insurance industry was once deemed reluctant to change due to its outdated, heavily regulated system. However,the expectations for insurance software have changed. We are witnessing a digital transformation in the industry. Insurance companies now improve customer experience and stay competitive through top-notch insurance software quality. The adoption of these new tech brings in the need for rigorous insurance application testing.
There has been much hype in the media surrounding language models like ChatGPT because they have the potential to revolutionize our interactions with computers and enable the automation of various tasks. ChatGPT is a natural language processing (NLP) platform driven by Artificial Intelligence (AI). It is trained on a large text dataset and can induce text based on input. ChatGPT can be used for a variety of tasks, similar as language restatement, text summarization, content generation, and more.
Insurers have been slammed by inflation, with loss costs surging by $30 billion in 2021 alone. Almost every line of insurance has been hit with rising claims expenses, while replacement costs have risen by 16.3%—nearly twice the consumer price index rise. To combat inflation, insurers need to find better ways to increase efficiency and reduce claims leakage. In addition to economic pressures, insurers are also facing rising customer expectations for a faster and more transparent claims process.
As technology continues to advance, the insurance industry is seeing a shift toward automated underwriting approval processes. This trend has been gaining momentum over the past few years and is expected to grow as insurers seek to streamline their operations and reduce costs without losing the human touch.
With record-high inflation, climate change, and an economic downturn on the horizon, the insurance industry is in a pressure cooker of unpredictable change. Sometimes this change happens over time. Sometimes it seems to happen all at once. To come out on top, insurance companies need new workflow and operations strategies that leverage process automation to streamline processes, reduce errors, and improve the customer experience.
Leading insurers are prioritizing claims process automation. Why? Because expenses related to preparing, processing, paying, and adjusting claims represent the most significant share of an insurer's operating costs. Even more than that, 87% of policyholders say the claims experience directly impacts their decision to stay with an insurance provider. But for many insurers, complex workflows, siloed data, and disparate systems have turned the claims process into a painful customer experience.
