The use of Artificial Intelligence for insurance policy checking has grown by leaps and bounds as AI tools can rapidly compare a high volume of policy clauses and make human reviewers faster and effective.
And why would they not? The technology that helps in automating the review of insurance policies has progressed dramatically over the years. That’s one of the reasons insurance companies are adopting AI-driven policy checking for greater efficiency.
What is Artificial Intelligence?
AI consists of a constellation of related technologies including Machine Learning. It is a subset of AI in which computers use statistical models and algorithms to identify patterns in data without the need for reprogramming. ML makes predictions based on data with the use of techniques such as decision trees.
Another type of machine learning, Deep Learning, loosely mimics the neural pathways in a person’s brain. It is a self-learning model where algorithms attempt to model high-level abstractions in data. Natural Language Processing (NLP) yet another type of machine learning empowers a computer to understand, analyze, manipulate, and generate human language. NLP is quite useful for identifying and tagging phrases in documents.
The Importance of Policy Review in Insurance
Policy review is an important process that makes sure insurance policies follow rules and meet customer needs. It usually involves checking things like underwriting, claims, and compliance to help keep the company running smoothly and profitably.
But doing all this manually takes a lot of time and can lead to mistakes. As competition grows and customers expect faster service, insurance companies are now using AI to automate policy reviews. This helps them work more efficiently and accurately.
When is AI better?
The unmatched speed of AI in checking a high volume of policies for accuracy and E&O errors allows it to quickly automate the laborious process of reviewing insurance policies. This is the most significant advantage of using AI in policy checking. It is incomparable when it comes to reducing the number of policies it can review at speed.
Another significant and distinguishing advantage of AI is that the results of the AI tool derived from the data can be validated statistically. The data can be analyzed to estimate the accuracy of a model’s predictions and create a feedback loop of self-improvements.
AI can be especially valuable in flagging policy renewal dates so that they can be checked for changes or errors before regulatory deadlines for policy renewal or revisions. It can monitor contractual obligations by an insured party, including premium payments and changes required such as safety inspection with no human needed to track compliance.
The Role of AI in Insurance Policy Review
Artificial Intelligence (AI) is transforming how insurance companies handle policy reviews. Traditionally, reviewing policies meant going through large volumes of documents manually a process that was time-consuming, repetitive, and prone to errors.
- AI changes this by automating key tasks such as:
- Extracting and analyzing policy data
- Identifying coverage gaps or inconsistencies
- Comparing policies against regulatory requirements
- Flagging outdated clauses or missing endorsements
With technologies like Natural Language Processing (NLP) and Machine Learning (ML), AI can understand and interpret complex insurance documents at speed and scale. This means insurers can now review more policies in less time, with greater accuracy and consistency.
AI also helps improve decision-making by providing real-time insights and suggestions, reducing the need for manual checks and back-and-forth corrections. As a result, insurers can enhance operational efficiency, reduce compliance risks, and deliver a better experience to their customers.
Catch up with savvy insurance customers or get left behind
Insurance customers are not satisfied with most of their service providers. In a recent study by Morgan Stanley and BCG, the report claims that insurance companies provide a poor customer experience (CX). The report goes on to mention that about 60% of insurance clients worldwide aren’t satisfied with their service providers and around 50% of insurance clients are considering the switch to newer models.
Since the COVID-19 pandemic, more consumers are looking at providers with strong digital offerings. A Survey by the PWC reports that 41% of consumers are likely to switch their insurance company for a digital-first company.
Embrace the future of policy checking with Exdion Policy Check
Exdion Policy Check is an automated policy check solution that digitizes and standardizes the entire process of comparing a policy, quote, and binder against a new policy in minutes. It is a purpose-built AI solution for policy checking that is an efficient, cost-effective, and customer-centric approach to review policies for errors and omissions before issuance.
Automated policy checking capabilities using advanced AI and machine learning, combined with insurance-focused vocabularies are the future. Exdion Policy Check is an automated, on-demand service that empowers brokers and agents to focus on policy reviews.
It ensures appropriate policy coverages are in place, terms and conditions are accurate and the risk of errors and omissions is reduced. The automated solution can also replace traditionally manual processes, lower policy checking costs and turnaround times and drive operational efficiency.
Until now, agencies had to hire more employees or outsource manual policy checking to validate lengthy policies for accuracy. This costly, and error-prone process, which could expose insurance agencies to unnecessary E&O risk is time-consuming.
Exdion Policy Check helps brokers and agents systematically check policies for potential errors and omissions before issuance. Book a demo with Exdion Insurance today!
FAQs
1. How is AI used in the insurance industry?
AI is used in the insurance industry for automating claims processing, underwriting, fraud detection, customer service, and policy review. It helps insurers reduce manual work, enhance accuracy, and improve customer experiences.
2. What is the role of AI in policy review?
AI streamlines policy review by analyzing large volumes of policy documents, identifying errors or gaps, ensuring regulatory compliance, and generating recommendations—making the review process faster and more reliable.
3. What are the benefits of using AI in insurance policy management?
Benefits include faster processing times, reduced human error, improved compliance tracking, better risk assessment, and cost savings. AI also helps insurers personalize coverage based on customer data.
4. Can AI replace human underwriters or policy analysts?
AI enhances but doesn't fully replace human experts. It handles repetitive and data-heavy tasks, while humans still oversee complex decision-making, judgment calls, and customer relationship management.
5. What challenges do insurers face when adopting AI for policy review?
Common challenges include data quality issues, integration with legacy systems, high initial costs, and the need for skilled personnel to manage and monitor AI tools.
