With the emergence of artificial intelligence over the last decade, insurers’ painstaking work to identify trends and analyze data increasingly has become automated.
A process that once involved “looking through reams of paper” and took weeks to complete can now be accomplished in a matter of hours or minutes, according to Allan Huddy, vice president of Blue Cross Blue Shield of Michigan’s analytics center of excellence.
Like other sectors, the insurance industry is going through significant changes fueled by the growth of artificial intelligence.
“It’s changing the insurance game,” Huddy told MiBiz. “It’s changed how you do care management, setting up programs with regards to products and services. It’s changed it all. It’s a game-changer across the board for an insurer like ourselves.”
Health, life, and property and casualty insurers use AI across their operations to analyze vast volumes of data and identify and respond to emerging trends better and faster than they ever could before.
In the health insurance field, for example, carriers deploy the technology to analyze members’ claims trends, which can determine the potential future risk, onset or progression of medical conditions or illnesses. Their medical claims can indicate whether they may need hip or knee replacement surgery as they age, or predict if they could develop a chronic condition such as diabetes in the future, Huddy said.
Through AI analyses, health insurers also can gain better insight on which hospitals and doctors provide the highest quality of care and at the best cost, potentially leading to reduced costs and improved medical outcomes. They can use the data to steer members to the best care providers, who are often required to regularly submit outcomes data to health insurers.
Huddy said AI gives health insurers like Blue Cross Blue Shield the ability to better fashion and design products and to personalize care for members. As it evolves, the technology will only take on a larger role in health insurance, particularly as carriers learn more and better understand how to put big data to use.
“This is just the beginning because we’re just scratching the surface of how to organize the data to be able to do the analytics,” Huddy said. “Once those barriers are broken and we’re able to figure some of that out and organize ourselves as a health care industry a little more, I think you’re going to see a lot more capabilities and a lot more possibilities.”
The use of AI in the insurance industry goes beyond health plans. Life, property and casualty carriers and agencies also use the technology in internal operations and to gauge risk and more precisely underwrite and price policies for clients.
“AI and its related technologies will have a seismic impact on all aspects of the insurance industry, from distribution to underwriting and pricing to claims,” according to a March report from McKinsey & Co. “Advanced technologies and data are already affecting distribution and underwriting, with policies being priced, purchased, and bound in near real time.”
Just last year, Grand Rapids-based broker Acrisure LLC acquired the insurance practice of Tulco LLC, a Pittsburgh, Pa.-based AI company. The AI and robotic-processing ability that the acquisition gave Acrisure now gets used in back-office administration and sales and marketing functions, CEO Greg Williams told MiBiz earlier this year.
Lighthouse Group, a Grand Rapids-based insurance agency, has been using AI internally to “enhance decision-making, productivity, client experience and market/partner connectivity,” Vice President of Operations Sarah Hudson wrote in an email to MiBiz.
“Decision-making and productivity are our biggest opportunities in the near-term and begin with a solid data strategy, which is the current phase of our roadmap — first gathering and integrating data in our source systems and then enhancing via third-party sources based on need or opportunity,” Hudson said.
Later phases will pair the data with software “to deliver higher value client experience via loss mitigation services, alternative risk solutions, new product development,” she said.
In survey results released in July, insurance brokerage and advisory firm Willis Towers Watson reported that life and property and casualty carriers plan to increase their use of automation over the next five years in actuarial operations to “provide greater agility in decision making,” and to deeper analyze data. One issue the industry faces is a “continued reliance on Excel tools” that “can be cumbersome to update and are prone to error,” according to the Willis Towers Watson 2021 Global Automation in Insurance Report.
The firm noted the pandemic, regulatory pressures and the need for greater insight on cost challenges have accelerated the trend.
‘So much data’
At Blue Cross Blue Shield, the company also uses AI to keep up with competitive pressures, Huddy said.
“The technology and data is obviously one of those sink-or-swim types of scenarios,” he said, noting that “we need to be in that space to be able to keep up with the competition and also with the information out there.”
“The competition is ramping up where there is a demand where we need to do this to make sure we’re delivering the best care we can for our customers by getting the best information to be able to guide them through their health care journey and keep their costs down,” he added.
Given the troves of data now gathered through medical claims, from health systems and physicians, and via wearables that monitor a patient’s health, insurers have embraced AI to manage information and better understand trends.
Priority Health has “been on this journey for a couple years at least, if not longer” to deploy AI, said Nate Foco, the Grand Rapids-based health plan’s vice president of marketing and customer experience.
“With so much data, you need it to ultimately sift through where the meaningful insight really is,” Foco said.
For example, Priority Health uses AI to personalize messaging to steer members to a healthier lifestyle so they can prevent illness, or to offer “nudges” for them to seek the care they need to stay healthy, Foco said. Doing so also ensures members “get the most out of the plan they bought,” he added.
In using AI to better analyze data, Priority Health can personalize member and employer messaging about benefits and health and wellness offerings. The outreach that may work on one person may not work on another based on their personal circumstances, Foco said.
Priority Health has used AI for medical claims analyses for member communications designed to reduce the inappropriate use of emergency room visits when a medical issue is best addressed at a lower-cost urgent care center, primary care office or a virtual visit, Foco said.
As well, AI can help health insurers to better understand social factors that affect a person’s health.
“That’s where AI and machine learning comes in (with) using all of the data we have available to us as a health plan,” Foco said.
A new use for AI is a Priority Health initiative that’s close to launching that will identify pregnant women who may have a risk for developing diabetes, which is just one example of taking a proactive approach and personalizing care to prevent the onset of illness, he said.
“That’s going to be the future for a lot of machine-learning and AI-based opportunities,” Foco said. “Making sure we connect that in a consistent way and a meaningful way, I think, is really the next phase of personalization.”