Posted on 18 Aug 2017 by NIKKEI
U.S. insurance companies using AI client interfaces to make quotes and payment convenient
“I just had to answer some easy questions on my smartphone and I’d signed up for insurance in less than 5 minutes. It was easy.” A New Yorker in his 30s, inspired to sign up for property insurance by his recent purchase of a high-end bicycle, described his experience with insurance startup Lemonade.
The New York-based startup, founded in 2015, uses an AI for its customer interface. Everything from the sign up process to paying out claims is done through a smartphone app.
Although the United States insurance industry, like Japan’s, has seen a decline in its customer base that’s particularly pronounced among young people, more than 80% of Lemonade’s clients are 44 or younger. The absence of sales pressure and in-person meetings has been well-received. The company has expansion plans beyond its current footprint in four U.S. states.
The U.S. is seeing an increase in “insurtech” (a neologism made by combining “insurance” and “technology”) businesses, which follow in the technology-embracing footsteps of the lending and financial payment industries.
The selling point is using AI and big data to speed up the insurance quote and claims payment processes. Insurance products that keep both the sign-up process and the costs to a minimum are gaining attention, particularly from young people.
One firm after another is opening with the goal of advancing technological innovation in existing insurance companies. “A look at your face is enough to know how long you’ll live.” That sounds like face- reading fortunetelling, but is in reality a technology developed by Lapetus. Using a single picture of a face, it claims to be able to estimate sex, age, BMI, and life expectancy. It works by using machine learning-trained computer to analyze 100 different facial markers from the image.
An insurance company in the United States has begun using Lapetus’s facial photograph analysis technology to produce rough estimates of life insurance premium payments. The technology can be used to analyze whether the health history and other data supplied by potential customers is accurate.
The company’s founder Karl Ricanek emphasizes that his company’s technology holds costs and premiums down, allowing more people to sign up for insurance.
Galaxy AI, which was founded in 2015, fixed its sights on the cumbersome auto insurance claim reimbursement process. Send a picture of the accident via an app, and it returns a payment estimate in only a few minutes. Claim approvals which used to take nearly a month could be completed in days.
Galaxy AI cofounder Jasjit Maggu says many insurance companies became interested after just seeing the prototype. The company is in discussions to implement its technology with insurance companies in several Asian countries, including in Japan.
Large insurance companies are also focusing on incorporating the latest technology. Cigna, one of the five largest health insurance firms in the United States, is making efforts to improve its AI-powered services. In January of this year it teamed up with medical start-up Prognos, which aims to create a disease-prevention service using an AI it developed to make early diagnoses and help with health maintenance.
These collaborations, established by companies teaming up with startups to create new services, are reminiscent of how the banking industry has worked with firms that have experience with the blockchain technology and digital currencies. Throughout the world, the ongoing integration of IT into every kind of finance-related field continues.
This is a translation of an original article published on August 18, 2017 on the morning edition of The Nikkei
Read the original article (in Japanese) here.