NEW YORK, LONDON & HONG KONG–(BUSINESS WIRE)– Up to $170 billion in insurance premiums could be at risk in the next five years due to problems that have occurred, and underwriting inefficiencies that could cost other companies $160 billion over the same period, according to a new report by Accenture ( NYSE: ACN).
report, “Why AI in Insurance Applications and Underwriting?, is based on a survey of more than 6,700 policyholders in 25 countries; more than 120 applicants in 12 countries; and more than 900 registered US citizens. It explores how insurance companies are responding to the latest market trends, pressure from new competitors, challenges faced by underwriters, and the growing demand for loyal customers – and how artificial intelligence (AI) technologies can be used to satisfy and retain customers. and change the underwriting process.
The report found that a third (31%) of respondents were not fully satisfied with their experience over the past two years. Of these 31%, six out of 10 (60%) mentioned the speed of settlement and 45% mentioned difficulty in closing.
Dissatisfaction surrounding claims is a major reason why customers switch insurance policies. About one-third (30%) of dissatisfied consumers said they had changed carriers in the past two years, and another 47% said they were considering doing so. Overall, consumers who said they were dissatisfied could represent $34 billion in annual revenue, or up to $170 billion over the next five years.
The report says AI technologies could improve claims processes. For example, four out of five (79%) of the executives who were asked said that they believe that automation, AI and data analysis using machine learning can bring benefits in all aspects of the value chain – from reporting fraud, damage estimation and loss. , retention, modification, optimization, and subrogation. However, the adoption of these technologies has been slow to date, with nearly one-third (35%) of senior executives reporting that their organizations have made progress in using these technologies. This may change, as almost two-thirds (65%) of insurance companies plan to invest $10 million or more in this technology over the next three years, prioritizing the use of AI and automation technologies, according to the regulator’s survey.
The report also found that insurance can reduce costs by using AI technologies, which will generate $160 billion in benefits by 2027. As underwriters are currently struggling with aging systems and ineffective methods, the study found that up to 40% of them. time is spent on unnecessary and administrative costs – an annual loss of between $17 billion and $32 billion. More than half (60%) of the underwriters surveyed believe that changes can be made to the processes and tools of their organizations.
“AI is not the technology of the future, but a technology that many insurance professionals are already implementing to help inform customers and empower employees,” said Kenneth Saldanha, who leads Accenture’s global insurance practice. “As people and AI become more integrated in insurance, companies will be able to reshape the way they work, become more efficient, fluid and flexible. Those who have already begun to advance AI will be able to create a competitive advantage.”
Read the full report, “Why AI in Insurance Claims and Underwriting?” understanding how to manage AI at the insurance level.
The report is based on four surveys of insurance and underwriting cases, analyzing customer and employee experiences and how insurers are responding:
A survey of 6,754 policyholders in 25 countries on their recent experiences in filing auto and property insurance claims;
A survey of 128 insurance executives in 12 countries about their claims agencies’ strategies;
A survey of 434 US-based casualty insurance holders, conducted in conjunction with The Institutes, an insurance education provider; and
A survey of 500 US life insurers on technology adoption.
To arrive at the value of $ 170 billion at risk, Accenture used a model in conjunction with a survey of 6,700 people who claim insurance, analyzing the global market for car and property insurance to calculate the number of annual premiums and the number of people who claim. per year. This was used in conjunction with a consumer survey about the number of people who said they were not satisfied with their experience and who said, because of their dissatisfaction, they would change carriers or do so in the next five years. Accenture also used a similar method to calculate the $160 billion profit in recruiting – taking into account the sum of personal, business and annual living expenses and the cost of hiring employees to determine how much they spend on recruiting. The efficiency gains were calculated to be 0.5-1 percent of the total revenue, which represents between $9 billion and $15 billion worldwide per year.
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