Businesses will be forced to reconsider their spending priorities as a result of the COVID-19 pandemic, and insurers are likely to ramp up investment in artificial intelligence (AI), according to GlobalData.
The data and analytics company said that investments in AI are expected to focus on speeding up claims and detecting fraud as coronavirus continues to highlight weaknesses in these areas.
The COVID-19 outbreak has resulted in a spike in claims across several lines, including travel insurance and business interruption policies, while financial hardship could result in more fraudulent claims.
GlobalData found that 67% of firms in the insurance industry are currently using AI, and that adoption remains lower than for other technologies like cloud computing, big data, and the Internet of Things.
“COVID-19 is bound to accelerate the use of AI in claims processing regardless of whether insurers opt to invest directly in the technology or through partnerships,” said GlobalData senior insurance analyst Beatriz Benito.
“These investments will ultimately benefit customers through more streamlined processes, faster claim resolutions, and quicker payouts.”
Coronavirus has reduced face-to-face contact between customers and agents, and as social distancing measures remain in place, GlobalData said that submitting claims digitally will become paramount.
This comes after forecasts by Juniper Research suggested that AI will help insurers underwrite $20bn (£17bn) worth of premiums by 2024, a more than 1,500% increase on the £1.3bn for 2019.
AI cost savings are expected to soar from around $340m to $2.3bn as the technology streamlines underwriting processes.
“At a time when insurers are moving towards discontinuing the sale of products and waiving deductibles, the adoption of technology such as AI, which offers the prospect of operational savings and efficiencies, is likely to captivate the industry’s interest,” Benito added.