A powerful partnership: How AI is enhancing the role of insurance brokers
18 Jul, 2023

Jurgen Hellweg, Chief Executive Officer of Western National Insurance

 

The ability of AI technology to conduct detailed risk assessments, expedite claims and analyse large datasets will lead to role-players in the insurance sector reassessing the role of brokers in the future. However, given the undeniable value of human connection as a tool to build relationships, offer tailored advice and aid negotiations, the future is one of symbiosis – a collaboration between man and machine.

 

This is the opinion of Jurgen Hellweg, CEO at Western National Insurance who sees the future role of brokers as specialists whose service offerings will be enhanced by AI rather than being replaced by it.

 

AI and insurance: then and now

 

Prior to the most recent launch of generative AI, this technology was being used in various forms for many years. By using AI, insurers have been able to automate certain contact centre functions, develop website chatbots and make use of machine learning systems to process data more efficiently. Pay-how-you drive telematics programs and the use of drones to conduct property surveys are further examples of how AI is being leveraged by the insurance industry.

 

Today, brokers can use AI to learn more about the demographics of their client base. As a data analysis tool, it can also provide invaluable insights on a client’s specific risk exposures.

 

In future, these use cases will expand to other aspects including AI-assisted risk assessments that will help insurers build more customised risk solutions, reduce human error, expedite the claims settlement process and provide 24/7 customer service.

 

Enabling a more tailored service offering

 

As Hellweg explains: “Equipped with a clearer picture on risk provided by AI, brokers can get exceptionally detailed about understanding and servicing their clients as well as their businesses. This deeper level of understanding will become an integral part of providing a higher standard of advice that will bring meaningful value to and bolster the broker-client relationship.

 

It will also assist brokers in dealing with more case-specific, complex risks that face specific industries. Brokers who already understand their clients’ individual needs and preferences will be able to play a more prominent role in helping clients explore their options and make more informed decisions about their insurance cover and risk mitigation strategies.”

 

Making the claims process fairer and faster

 

AI technology is particularly effective as a tool that can streamline the claims process. Its ability to process large volumes of data at the push of a button means that it can detect anomalies, flag claims that are suspiciously high and identify patterns in clients’ claims histories. It can also be used to identify and prevent fraudulent claims, resulting in reduced losses and ultimately, lower premiums for honest customers.

 

By introducing pre-defined rules and parameters into AI systems, the technology can be used to ensure consistency in claims assessments and counteract human oversight. Over time, with input from insurance adjustors, forecasts made by AI based on historical claims data, will become more accurate, refined and reliable.

 

The importance of human intervention

 

AI, however, does have its limitations. If the data used to train an AI system is biased or incomplete, there is a risk that these systems may continue to perpetuate the unfair treatment of clients. The final decisions made when paying out claims, can therefore not be made by an autonomous program. Instead, findings generated by AI need to be reviewed by human assessors in order to take the client’s unique set of circumstances into account. As intermediaries, brokers are therefore key to ensuring that the commitments of insurers to treat customers fairly are upheld.

 

As Hellweg suggests: “Brokers will continue to act as mediators and negotiators between clients and their insurers. This aspect of customer service requires human-to-human interaction as well as relatability and will always be an indispensable part of advisory offerings.”

 

Adding to this, he argues that trust and credibility are irreplaceable pillars within the insurance industry. Despite the accuracies and efficiencies of AI technology, many clients still distrust these systems and have concerns around the invasion of their privacy. The true ability to appreciate and cater to the client’s emotional involvement in their business cannot be replicated by AI.

 

By applying an empathetic approach, brokers can interpret the benefits of different insurance solutions within the context of their clients’ businesses.

 

This goes a long way in providing the insured with the choice and control they need to see the true value of insurance products rather than regarding them as grudge purchases. “Here, as in other cases, brokers bridge the trust gap by nurturing the interactions that can build long-term relationships and rapport with clients,” concludes Hellweg.

 

 

ENDS

 

Author

@Jurgen Hellweg
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