Advantages and Disadvantages of AI in the Insurance Industry

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Business Research

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Contents
Introduction...........................................................................................................................................2
Literature review...................................................................................................................................3
Advantages and Disadvantages of AI in the insurance firms.............................................................6
Conclusion.............................................................................................................................................7
REFERENCES......................................................................................................................................8
Introduction
Artificial intelligence is the future of the technological advancements. It can be
understood as the intelligence that is displayed by the modern day machines (Scherer, 2015).
They develop this by evaluating the amount of data that they have stored from their past

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experiences (Noto, 2018). In this Machine understands its environment and responds
accordingly. Use of artificial intelligence is going to increase in the coming years. It is going
to enhance the efficiency of the business as well as it will reduce the numbers of errors that
occurs due to human errors (Ngai and et. al., 2011). In many cases it can be seen that artificial
intelligence is not only changing the business but it is changing the overall dimensions of the
business and hence improving customer experiences. This report also showcases the
advantages and disadvantages of using AI in the working of the insurance company as well as
its usefulness in lives of the people.
Literature review
In the views of Göranzon and Josefson (2012), Artificial intelligence is the
technological advancements on which the future of the business is leaning towards. It is not
only going to reduce the efforts of the employees but it is also going to enhance the efficiency
of the firm. This is due to the fact that most of the time the fault in the business is due to the
errors done by the human beings or due to the reason that machines did not have the capacity
to think according to the situation. They generally work according to the particular set of
instructions that is fed into them. This makes them irresponsive towards the environment that
they are in. It creates a situation in which machines also becomes ineffective. Use of
technology was for the reason to make work more effective and if they do not have the ability
to think then it may reduce its efficiency. There are several aspects to the use of technology
i.e. from reducing human interventions to reducing the human interference (Tao and Li,
2011). This cannot be possible without machines smarter.
According to the views of Wu and Olson (2013), Artificial intelligence is changing the
lifestyle of the people all around the world. It has got greater influence in the daily activities
of life. From transportation to medication and from research to agriculture in almost every
field it has made greater contribution and made the whole process smarter. It has also reduced
the amount of human interventions that was previously required for doing a job. Artificial
intelligence has empowered people who have severe disease in performing many of their
personal life activities (Broeksema and et. al., 2013). In some of the restaurants of Japan,
humanoid robots serve food to the consumers. There are many areas like security of
organisation as well as home can be done in a better way by the use of artificial intelligence
technologies like face or voice recognition.

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On the other hand Omoteso (2012), Suggests that there are many areas in which artificial
intelligence is utilised properly. These advancements have only been implemented and
trusted in certain areas of greater importance like the medical, research, transportation,
military etc. There are several other business areas in which AI can be utilised especially in
the banking and insurance. It not only helps the insurance providers in making their processes
easier but it also assists the consumers in understanding the whole process and then taking the
services. It is to be understood that there is larger number of people who are the consumers of
the insurance company. It has become essential for the companies to make use of the most
advanced AI technologies for the making process easier for consumers. It helps in bringing
highest order of satisfaction in the minds of consumers.
According to Dirican (2015), Most of the people that are taking the services of the insurance
company has been disappointed by the services they have receiving over the years. It is also
to be understood that this is the industry in which least amount of technological
advancements have taken place. The innovation have not been properly utilised in this field
in spite of their extraordinary benefits to the people (Morgan, 2018). There are several
reasons that are responsible for it. One of the primary reasons for this is that insurance
industry is related with the changing norms and the authenticity of the machine learning is
still under research.
On the contrary Kirlidog and Asuk (2012), states that Insurance industry is facing a lot of
difficulty in terms of providing better experience to the consumers. For example if the
employee has gone on vacation then consumer has to wait for him to return for claiming
request. It is not only increasing the workload of the workers but also enhances problems
related to the efficiency of the firm. This frustrates both consumers and employees. On the
other hand Turban, Sharda and Delen (2011), says that AI can be applied for improving the
claim processes. This brings the system where touch less claims can be filed and human or
worker’s intervention is not necessary. With the use of AI, individuals can easily report the
claim, capture damage, make audit of the overall system and procedures as well as they can
communicate with the consumers. This affect the industry as it enhances the speed of the
working process as well as allows customers to file claims without having to wade through
red tape (Lacasse and et. al., 2016). He also underlines the fact that the companies that have
implemented the technology long ago has saved a lot of time as well as they are able to
maintain the quality. It is necessary for improving the employee satisfaction as well as
making positive brand image of the firm.