Generative AI in Practice is InsTech’s monthly newsletter dedicated to the use of generative AI in insurance.
The InsTech Perspective
When customer service hallucinates
Interacting with ChatGPT is the main way that many people have experienced generative AI. We know advanced AI can respond quickly and naturally to any question, which raises expectations when we use other chatbots. Chatbots are an important customer service tool for companies, but using generative AI to make them faster, more eloquent and capable should not come at the cost of losing control over what they say.
One company that got the balance wrong is Air Canada, whose chatbot was asked about a specific refund policy in late 2022. The airline’s chatbot improvised by stating a policy that sounded great but did not really exist. A customer paid for their flight, then found out they were misled when they asked for a refund under the policy. Last month, the airline was forced to honour the chatbot’s word after being sued.
As this month’s issue of Generative AI in Practice shows more examples of insurers using GenAI than ever before, companies need to make sure the right controls are in place for their AI initiatives. This especially applies to consumer-facing use cases. We also see more insurers looking to offer coverage for AI errors, with Aioi Nissay Dowa joining Munich Re, Greenlight Re, Swiss Re, Chaucer and others. As examples like Air Canada show AI risk materialising, there is an opportunity for insurers to help de-risk companies’ AI projects.
Use case of the month
Empowering claims staff through automation
From general insurance to specialty, customers expect their claims to be handled transparently, empathetically, quickly and accurately. For insurers, an effective claims process should yield increased renewal rates, reduced loss ratios and lower operating costs, but many insurers struggle to achieve a consistently efficient and high-quality claims service.
Generative AI enables tasks that only humans could do before to be automated accurately. These include extracting key information from evidence documents and comparing what is claimed to what is covered. This helps claims staff spend more time on complex cases and customer service.
To find out what claims automation looks like in practice, through different stages of a claim, with real case studies, you can read our new report, published in partnership with Simplifai – Automation in claims: a beginner’s guide.
What the insurance industry is doing with GenAI
Chubb has commissioned technology firm Cytora to digitise its global claims intake. Cytora specialises in generative AI-powered insurance workflows. Initially this was for underwriting; Chubb is Cytora’s first publicly named client for claims.
Insurer IAG is using generative AI to speed up its claims handling process. In a 2023 New Zealand flood event that caused 48,000 claims, it was able to process 150 large claims an hour. Previously it could only process 500 large claims per day.
Start-up cargo insurer Parsyl is using generative AI to analyse its clients’ shipping routes, with technology from Amazon Web Services.
Indian start-up broker Plum has been providing its policyholders with a GPT-powered customer service chatbot since April 2023. It says the chatbot resolves 68% of queries (the rest are referred to humans). Most of the queries are customers asking what is and isn’t covered.
Nationwide is using technology from start-up DigitalOwl, which specialises in analysing medical records using GenAI, for life insurance underwriting. We reported last month that Reinsurance Group of America invested $12 million USD into DigitalOwl.
Meanwhile, Nationwide is funding GenAI start-ups too, with an investment into claims specialist CLARA Analytics.
AXA’s head of computable contracts says eight out of ten people cannot understand or have not read their insurance contracts. AXA is looking to combine computable contracts and generative AI technology to help customers understand exactly what they are covered for.
US start-up insurer Lemonade says a fifth of all the emails it receives are responded to by generative AI, claiming it can provide ‘entirely empathetic and precisely worded’ responses.
Canadian broker Billyard Insurance Group is using generative AI to streamline data intake and complete application forms.
UK insurer Admiral has expanded its relationship with Google Cloud to use its generative AI capabilities.
Asian insurer FWD Group has partnered with Microsoft to access OpenAI’s GenAI models. FWD is also an early adopter of the AI assistant Copilot for Microsoft 365.
Greek insurer Eurolife, part of multinational insurer Fairfax Financial, is setting up a ‘generative AI and digital hub’ in Athens to develop AI solutions for insurance businesses in Greece. It is working with consulting firm LTIMindtree.
French start-up health insurer Alan says its employees have become 40% more productive since using AI assistants for coding, meeting notes and other tasks.
(Re)insurers Chaucer, Greenlight Re and MS&AD have invested in Armilla AI, a start-up developing insurance products for AI risks.
Insurer Aioi Nissay Dowa has developed an AI insurance product, covering risks such as GenAI tools infringing copyrights or producing defamatory outputs. Japanese GenAI firm Archaic is its first policyholder.
Upcoming events
Now that many pilot projects have been tried, what are the proven use cases? QBE Ventures, Miller Insurance and Inver Re (Ardonagh Group) will be discussing generative AI in an InsTech webinar on 28 March. Register here.
Repetitive manual processes can be unproductive and demotivating – can AI help make working in insurance more rewarding? Join us for a live chat on 18 March with holistic wellbeing consultant Ingrid Woodward and Insurants’ Ben Platts.
Send is investigating the impact of AI on underwriting in a webinar with Generali and InsTech’s Henry Gale on 13 March.
News from the InsTech network
Verisk has launched a generative AI auto-summary capability in its Discovery Navigator solution, a tool for reviewing medical records for property and casualty claims.
Munich Re says AI exposures could become a significant risk for insurers, with AI risks affecting traditional insurance coverage in unexpected ways.
Other news and insights we’ve seen
The Association of British Insurers has produced a guide to ‘responsible’ AI innovation, with a long list of questions to ask to ensure AI is used safely, fairly and accountably.
80% of insurance professionals say their organisation already uses or plans to use generative AI technology in the next 12 months, according to Reuters.
The Chartered Insurance Institute (CII) has launched an ‘introduction to data science and AI for insurance’ course. We understand the CII has been working with London Market insurers’ data science teams to refine the content.
How InsTech has used AI this month
While InsTech’s insights and our members’ stories reach 30,000 people across insurance and technology, we are always looking for ways to bring that content to new audiences. According to HubSpot, short-form video – a format new to InsTech – will see the most growth of any marketing content format in 2024. We wanted to try this out without spending hours on editing or investing in external creators.
Our designer Charlotte Salisbury has been using an AI tool called Descript to create our first short videos for YouTube. After inputting a longer form video we have already edited, Charlotte asks the AI to identify five good clips that are under 60 seconds long. She chooses two or three and uses Descript’s pre-built features to change the dimensions and add captions (with ‘um’s and ‘ah’s automatically removed). She can tweak the appearance of the captions where needed. After Descript automatically generates a title, it can publish the short directly to YouTube.
Compared to creating these manually, this saves hours of time for Charlotte. “If it wasn’t for Descript I probably wouldn’t be creating any of these clips.” You can watch one of them here.
Find out what you’ve missed…
Issue 7: Brokers using GenAI, InsTech’s expert bot and a conduct code for AI in claims
Issue 6: Algorithmic underwriting, return on investment and the AI shortage
Issue 5: In-house chatbots, AI in healthcare and designing reports
Generative AI in Practice is InsTech’s monthly newsletter dedicated to the use of generative AI in insurance – you can sign up for free here.