November 29, 2018
AI in the insurance industry: From pricing competitively to helping customers during crises
By: Jodie Wallis

The AI Effect is a podcast series exploring Canada’s burgeoning artificial intelligence ecosystem. Accenture’s AI leader co-hosts with reporter Amber Mac to look at AI’s explosive growth and the change—challenges and rewards—it can bring for individuals, business and society.

In Episode 5 we find out how AI is transforming the way insurance companies are transforming both their customer interactions and their operations.

Down at Lorenzo D’Alessandro’s repair shop in Toronto, 427 Auto Collision, machine learning makes it easier for the shop to work with both the insurance companies and the customers waiting for their cars by simplifying the processing and tracking of insurance claims.

At insurance company headquarters, AI helps insurers plough through masses of data to analyze risk so that premiums can be priced competitively at an individual customer level. Insurance companies need to price their rates low enough to get business, but not so low that they can’t afford to pay claims, explains Andrew Lo, former CEO of Kanetix, which helps customers shop for insurance and also helps insurance companies market their policies.

Kanetix works with (we featured VP Kathryn Hume in episode 2) to deploy AI in a number of ways. The company uses machine learning models to understand customer preferences and behaviours and then uses those insights to deliver personalized content and experiences that “inspire to trust.” It also uses AI to match the right customers with the right insurance providers—where the risk profile of the customer is aligned to the provider’s policies.

AI is also helping protect customers from damage and helping them get back on their feet after a disaster. Liberty Mutual developed a mobile app they call Cat Eye that uses AI to predict weather events and combine this information with data about customers’ property to mobilize people in real-time.

Cat Eye makes it easier to see where hurricane damage is most likely to occur, for example. That makes it possible to both provide customers personalized alerts, as well as speed up recovery and reduce administration to allow more time to be spent supporting customers at an emotional time.

Knowing where there will be a lot of claims activity in a concentrated area allows Liberty Mutual to engage outside help from adjustors. This is good for business—but it’s also great for customers. Recovery can start to happen in hours, with food, shelter and other immediate needs.

At TD, the bank’s chief AI officer Tomi Poutanen explains how his new employer came to purchase the company he co-founded, Layer 6, to help understand customers better. Layer 6 specializes in deep learning, invented in Toronto.

Tomi explains that “deep learning algorithms are very good at perceptual tasks; things like understanding the sentiment of a conversation.” As a result, these algorithms are starting to be deployed, for example, to tell whether a customer calling a contact centre is having issues or getting frustrated, so the bank can respond better.

While we set out in this episode to understand how large financial organizations are generating value from AI, we saw consistently that adopting AI solutions is good for humanity. Who knew we would uncover benefits like empathy, trust and emotional response?

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