Is the industry doing the ‘right thing’ when it comes to AI?

The insurance industry has been particularly focused on employing artificial intelligence (AI) to address pain points for customers, with claims processing standing out as a prime example.

However, Catherine Carey, head of marketing at Consumer Intelligence, noted that it was “important” for the industry to consider the “impact on its customers” and how it would provide, and benefit from the implementation of, AI.

Her comments came off the back of a Consumer Intelligence survey, conducted via its consumer panel Viewsbank, in September 2023, which collected the thoughts of 1,060 nationally representative consumers on preferred methods for reporting an insurance claim.

It found that 64% of respondents favoured reporting a claim over the phone with a call handler, while 29% preferred an online form with human review. Only a combined 7% expressed openness to AI handling this task.

Carey explained that, during “vulnerable” moments such as car accidents or home emergencies, respondents did not perceive AI as the ideal option.

She said: “While there’s a considerable industry focus on how AI can address these concerns, it’s crucial to first consider the impact on customers and how they will experience these changes.

“It’s essential that, when incorporating AI, the industry does the right thing by thinking about AI from the consumer perspective.”

The consumer 

Carey explained that the survey showed customers prioritised speed and efficiency in their interactions with insurance services.

Last year (14 September 2023), the Financial Ombudsman Service (FOS) released figures that revealed complaints over building, car and motorcycle insurance had hit a five-year high in the first three months of the year.

Some 3,869 complaints were made about car or motorcycle insurance, while there were a total of 1,776 building insurance complaints recorded during the period.

By comparison, the FOS recorded 2,626 motor and 1,275 building complaints between April and June in 2019.

In response to the heightened complaints numbers, the regulator said that it expected insurers to treat their customers fairly and promptly – and that it was “unacceptable” that complaints were driven due to a delay in claims being paid out.

Meanwhile, Carey noted that over 60% of surveyed claimants cited speed and efficiency as the element of the claims experience needing the most improvement.

Various companies in the industry have been exploring their options for improving speed and efficiency by implementing AI into the claims process to improve speed and efficiency.

For example, Zurich said it was experimenting with AI for tasks like data extraction for claims and modelling in December.

And more recently, Sedgwick said it had been using AI to enhance the claims experience for customers.

Carey noted that Consumer Intelligence’s survey results had revealed a “relatively” even split, with 54% of respondents indicating that they felt they had a good understanding of AI, while 46% expressed that they did not.

This highlighted the need for a balanced and thoughtful approach when implementing AI solutions, taking into account varying levels of customer familiarity and comfort with the technology, said Carey.