AI improves insurance claim accuracy by 14 times, has taken on customer service: Policybazaar

Artificial Intelligence (AI) is changing the insurance sector, helping companies to operate with speed and accuracy, according to a new research report by Policybazaar.

AI has majorly sped up claims processing, improving claim accuracy by 14 times, the report said.

The report explained that claims are the most important part of any insurance policy, and AI is now playing a major role in identifying potential fraud cases early. For instance, in term insurance plans, approximately 11% of cases are flagged by AI for possible fraud, a number that rises even higher to 16% in savings plans. Early detection allows companies to expedite genuine claims. The report added this has led to a 14x improvement in the Early Claims Factor since 2022.

Beyond fraud detection, AI is now managing about 45% of certain insurance tasks, cutting down the need for manual work and minimising errors.

AI usage in customer service has also increased. Chatbots are now handling over 30% of first-contact queries, a significant jump from just 15% a year ago. Consequently, the Turnaround Time (TAT) for resolving customer queries has dropped by 15%, while customer satisfaction scores (CSAT) have risen to over 94% in the last quarter, Policybazaar said.

In terms of policy purchase process, issuing a policy could take around 4 hours earlier. Now, nearly half of all customers receive their policy in just 15 minutes. This ends up solving of the biggest pain points in insurance, i.e. long delays that often lead to customers losing interest.

Generative AI bots, still in testing, can now explain complex insurance terms in a simple and contextual way. This has led to 5-8% more people buying insurance during the product discovery phase.

AI also contributes to better management of customer complaints, with new AI tools accurately tagging customer tickets and directing them to the correct agent with over 84% accuracy.