The insurance sector in Kenya is gradually moving towards the new era of artificial intelligence technology in a bid to improve its business.
With the emergence of concepts like machine learning and generative AI, insurance companies are leveraging technology to better measure risk, combat fraud, and offer personalized pricing along with a host of other applications.
In Kenya, Prudential Insurance is the latest to join the wave after partnering with Google Cloud last month to develop an AI lab designed to accelerate insurers’ adoption of machine learning and GenAI.
In a statement following the deal, Prudential said the lab will provide a hands-on, testing environment for its employees to develop scalable AI products and applications, including access to leading language models, advanced and secure GenAI, data analytics, and end-to-end cloud delivery.
Earlier in April this year, health insurance technology platform M-Tiba announced the integration of AI into its claims processing system, a development that aims to reduce the waiting time for approvals to less than 12 hours.
The company also aims to use technology, particularly machine learning models, to improve efficiency and stop fraud, which it said would reduce administrative and medical costs for health insurance providers, ultimately helping them offer more affordable insurance products to their customers.
This comes months after Jubilee Insurance announced in June last year that it had earmarked Sh2.25 billion to spend on digital transformation, including investment in robotics, artificial intelligence and data analytics, as it seeks to roll out customised coverage and improve service delivery.
But how does the use of AI help facilitate insurance operations specifically?
Apollo Group CEO Ashok Shah, in Column published in Business Daily in MarchHe said AI was increasingly becoming a powerful tool in the fight against insurance fraud, which has plagued the industry for years as policyholders try to profit from unfair claims.
“Through advanced analytics and pattern recognition, machine learning algorithms can identify anomalies and irregularities in claims data. This not only helps prevent fraudulent claims, but also simplifies the claims process for genuine policyholders,” he added.
“By reducing fraudulent activities, insurance companies can enhance their profitability and maintain more competitive premium rates,” Mr. Shah added.
Chrisanthos Kholab, Senior Manager, Data Analytics and Digital Forensics at PwC Kenya, agrees with this sentiment, saying that automated system controls integrated with other third-party systems can help detect bogus claims by comparing claims data with other sources such as historical data, policy information and public records from regulators and other institutions to identify inconsistencies.
“Automated systems can collect multiple data points and help detect planned accidents or intentional injuries by analyzing claim data against factors such as location, type of damage, medical reports, unique engine features as well as the number of passengers involved to identify any suspicious patterns,” Mr. Kholab said in a press statement.Column in the daily business newspaper In June.
In addition to reducing fraud, as Fred Rooro, Managing Director of CIC, points out, embracing digital transformation will provide insurers with tremendous access to previously underserved or untapped markets.
With AI’s ability to analyze massive amounts of data from multiple sources, insurers can now make data-driven decisions in real time, which in turn will enable them to develop customized insurance offerings that meet the unique needs and risks faced by local policyholders.
“By leveraging technology, insurance companies can expand their reach to everyone from urban to remote areas and offer micro-insurance products tailored to people in the low-income bracket,” he notes. Mr.Roro in comment.
However, Mr. Roro says that for technology and the accompanying digital transformation efforts to deliver the desired outcome in the sector requires a concerted effort from all stakeholders, stressing that insurers must be willing to invest in technology infrastructure and talent development to build the capabilities needed to drive the transformation.
“Collaboration between insurance companies and industry players is essential to foster innovation and drive adoption of new technologies, which will create an enabling environment not only for increased use of insurance solutions, but also for enhanced efficiencies that will benefit entities within the ecosystem,” he added.