A Whole New Reason Your Insurance Claim May Be Denied

May 20, 2017 – Zurich Insurance has been around since 1872. It is responsible for brands that include Global Life and Farmers. In its 2016 report to shareholders, it noted cash generation of $10.4 billion over its last three years and operational cost savings of $300 million U.S. Operating profit was $4.5 billion in 2016, 55% higher than the previous year. Insurance obviously can be a very good business.

I wondered how many policies Zurich’s 60 million customers had with the company in the more than 210 countries and territories where it operated. These policies cover property, casualty and life insurance. Which gets me to the issue of insurance claims? Zurich currently operates 3,000 IT systems to handle the processing and administration of customer claims. It plans to reduce that number to 500 by 2019 investing $700 million in streamlining operations.

Which gets me to the issue of insurance claims? Zurich currently operates 3,000 IT systems to handle the processing and administration of customer claims. It plans to reduce that number to 500 by 2019 investing $700 million in streamlining operations. How does it plan to make this downsizing transition?

The answer is artificial intelligence (AI). If you are a Zurich policyholder an AI bot is about to become the processor of your personal injury claim. As reported in The Japan Times, AI bots are cutting processing time on Zurich policy claims from hours to seconds. The technology reviews claim submissions and attendant paperwork including medical reports and makes the decision. Pay or deny the claim. And the AI bot learns on the job with processes speeding up over time. The latest average processing time for a claim is 5 seconds.

So the next time you watch those television advertisements about Farmers’ Insurance, the movie star spokesperson telling you about “the thing or two” the company has seen, isn’t telling you that when you make the call it will be a robot taking a whole 5 seconds or maybe less to accept or deny your claim.

Zurich isn’t the only insurer moving to AI claim bots. In Japan recently, Fukoku Mutual Life Insurance began using AI bots to replace 34 claims processors saving $1.3 million per year. In the United Kingdom, Aviva is also moving to AI bot claims handling.