Insurance is an old industry still steeped in manual processes, but now many companies are incorporating artificial intelligence into their day-to-day operations in anticipation of its technological benefits. According to McKinsey, “if AI is fully applied to the Insurance industry its potential value is over $1 Trillion annually.

In the old world, financial models were once dependent upon statistical sampling of past performance to forecast future outcomes. Today, data science has enabled predictions based on real events, trends, and behaviors all in real-time. This means AI has the potential to affect the insurance industry in many ways such as fast-tracking claims, automating processing, and detecting fraud.

AI also helps insurers price insurance policies, select the most cost effective coverage, and recommend new useful products to their customers. Lastly, chatbots are being used to successfully improve customer service. In addition to answering questions, they are available 24/7 to give basic advice, check billing information, and address common inquiries. In 2016, an insurance chatbot named Jim set an industry record by settling a claim in 3 seconds.