Insurance, Latest News

Insurers may embrace AI to resolve claims

About 90 per cent of insurers in Australia have either implemented or are in the process of introducing generative AI for claims resolutions.

About 90 per cent of insurers in Australia have either implemented or are in the process of introducing chatbots or generative AI for claims resolutions.

According to a Gallagher Basset survey, it anticipates a 98 per cent improvement rate of speed and efficiency of claims, one of the ongoing sticking points between between insurers and repair businesses. 

In 2023, complaints to the financial watchdog over car insurance and claims handling continued to increase according to AFCA’s 12-month snapshot  with delays and claim amounts listed as key areas of negative customer feedback.

The Gallagher Basset figures, which look at the overall insurance industry, come as repairers look forward to a revised Motor Vehicle Insurance and Repair Industry (MVIRI) code that is more relevant with the prospect of covering some AI matters.

For the repair industry, MVIRI Code Administration Committee led by chair Stephen Jenkins is determined to increase understanding and acceptance of the code and has embarked on the recommendations outlined by the Schaper review in 2022 , targeting three key areas; a re-write of the code, corporate governance and the need for education and promotion of the code.

“The MVIRI is not intended to be an exhaustive manual for managing every conceivable dispute between insurers and repairers, however, but certainly insurers and repairers alike recognise the growing potential for AI to impact on the MVIRI Code,” Jenkins told NCR.

“There may be a role for the MVIRI to ensure fairness and transparency of repair estimation processes as adoption of these technologies become more widespread. Potential area for further exploration is the development of defined standards and guidance for the use of AI-assisted assessment and repair as part of the MVIRI would help address potential concerns around the use of these technologies.”

The benefits of AI

There are a range of sectors within the collision repair industry where AI can be useful now and in the future, as well as improve processes and efficiencies. These can include: 

  • Improved cycle times
  • Automated claims processes – days not weeks
  • Automated parts ordering
  • Automated salvage
  • Complete vehicle-repair database
  • Damage capturing

Survey and report findings

According to the Carrier Perspective: 2024 Claims Insights report there is a growing acceptance of generative AI and chatbots despite apprehension over the complexities of integrating AI.

Customer service is the most common application of AI among Australian insurers, and the 90 per cent adoption rate here is much higher than that of global insurers.

AI is also utilised more in claims processing in Australia (58 per cent), as well as in risk assessment operations (35 per cent), the report says.

Globally, the survey found 67 per cent of insurers use generative AI chatbots in customer service.

Insurers are also leveraging AI during training to streamline claims adjusting, with 44 per cent of insurers worldwide and 35 per cent in Australia saying an AI-powered workforce is an effective strategy to retain employees.

The head of sales and client services general insurance at Gallagher Basset, John White, highlighted the benefits of using AI.

“By embracing digital transformation, insurers can increase efficiency and cost savings, benefiting both themselves and their policyholders,” Basset says.

“It is going to be exciting to see how insurers proactively embrace external expertise, data-driven insights and other key tools.”

The survey says only 37 per cent of insurers are incorporating new technologies for assessing disasters and resolving claims following severe weather events. Among Australian insurers only 30 per cent are embracing these new technologies.

Best practices include satellite imagery, 3D technology, and predictive modelling technologies to analyse large datasets, such as historical weather patterns and claims data.

“Easing concerns over the integration of AI and establishing best practices in everyday operations is pivotal for the industry’s future,” Basset says.

Send this to a friend