Out of the United States, ratings agency AM Best also produces an insurance law podcast series, most recently featuring a discussion about the impact of artificial intelligence (AI) on the claims handling process.
In the discussion with AM Best’s managing editor of benefits insurance professional resources, John Czuba, Dan Thompson, president and CEO of DeeGee Rehabilitation Ltd. says AI is likely impacting everyone on a regular basis without us even knowing it.
After defining AI, machine learning (ML), deep learning, natural language processing and discussing systems designed to mimic the decision-making ability of human experts in specific domains, he says AI can empower insurance companies to streamline claims processing, enhance risk management practices and deliver better experiences for policyholders.
Thompson, a registered rehabilitation professional, provides expert opinion to insurance carriers, attorneys and medical professionals when assessing the needs and vocational capabilities of people with disabilities. The firm’s offices include one in Ontario.
Fraud detection
He says the technology is being used in fraud detection, claims processing automation, in data entry and decision-making. “AI models can assess the risk associated with individual claims by analyzing their history, the policy details and external factors such as weather patterns, or economic indicators. This helps insurers prioritize claims and allocate resources more efficiently” he says. He adds that the biggest gains for the technology, which is currently being used across industries, will be made in health sciences. Regarding insurance, the technology is also being used in predictive analysis. “AI can optimize the claim settlement process by determining the appropriate amount to pay based on policy coverages, the damages assessed and other relevant factor,” he says.
Essential to recognize AI’s limitations
That said, he adds that it’s essential to recognize AI’s limitations and ensure that humans remain in control, noting that potential pitfalls to using the technology include bias and fairness concerns. “AI and systems can inherit biases based on the data used to train them. They’re only as good as the programming that goes into them,” he warns. The technology also presents new ethical dilemmas, he says, as the rapid advancement of AI has outpaced the development of regulations, legal frameworks, guidelines and standards.
