Reseach Article
Reviewing the new AI paradigm in Property and Casualty Insurance
| Journal of Advanced Artificial Intelligence |
| Foundation of Computer Science (FCS), NY, USA |
| Volume 1 - Number 5 |
| Year of Publication: 2025 |
| Authors: Muhammad Imran |
10.5120/jaai202422
|
Muhammad Imran . Reviewing the new AI paradigm in Property and Casualty Insurance. Journal of Advanced Artificial Intelligence. 1, 5 ( Feb 2025), 15-22. DOI=10.5120/jaai202422
Abstract
In this paper, we examine the fundamental transformation of Property & Casualty (P&C) insurance through the introduction of Artificial Intelligence. This examination marks the shift from the traditional actuarial methods to a dynamically data-driven approach. Some key innovations include the buzz around Large Language Models (LLMs) for customer interaction, Internet of Things (IoT) enabled risk-monitoring in realtime and Machine Learning allowing for automated claims processing. The research highlights the early adopters like AXA, Lemonade and Allianz who are actively leveraging AI to reduce claims processing times by 80% while reducing manual labour and increasing customer satisfaction. The most critical of this transformation is the emergence of the roles that act like hybrid strategists. Such professionals combine traditional insurance expertise with acumen in technology. In our paper, we discuss the requirement of how AI demands more than just simple adoption. It needs a comprehensive restructure of organizational culture, better data infrastructure and better ethical frameworks. Development in Explainable AI (XAI) is also noteworthy for maintaining transparency, handling complex risks and addressing regulatory requirements while alignment with customer trust concerns.
References
- Roberts, Daniel P. Managing Change from Disruptive Innovation: United States Property & Casualty Insurance. Diss. Franklin University, 2023.
- Solomon, M. D., McNulty, E. J., & Rana, J. S. (2020). The Covid-19. N Engl J Med, 10.
- Deloitte. (2021). 2021 insurance outlook. Deloitte Insights. https://www2.deloitte.com/content/dam/Deloitte/tw/Documents/financial-services/pr210330-di-cfs-insurance-industry-outlook. pdf
- Belenguer, L. (2022). AI bias: exploring discriminatory algorithmic decision-making models and the application of possible machine-centric solutions adapted from the pharmaceutical industry. AI and Ethics, 2(4), 771-787.
- Owens, E., Sheehan, B., Mullins, M., Cunneen, M., Ressel, J., & Castignani, G. (2022). Explainable artificial intelligence (xai) in insurance. Risks, 10(12), 230.
- Young, D., Lopez Jr, J., Rice, M., Ramsey, B., & McTasney, R. (2016). A framework for incorporating insurance in critical infrastructure cyber risk strategies. International Journal of Critical Infrastructure Protection, 14, 43-57.
- Putha, S. (2021). AI-Driven Risk Management Strategies for Catastrophic Events in Insurance. Journal of Machine Learning for Healthcare Decision Support, 1(1), 163-206.
- Rawat, S., Rawat, A., Kumar, D., & Sabitha, A. S. (2021). Application of machine learning and data visualization techniques for decision support in the insurance sector. International Journal of Information Management Data Insights, 1(2), 100012.
- Madhala, R. T. (2024). The Role of AI in Enhancing Customer Experience in P&C Insurance. Australian Journal of Machine Learning Research & Applications, 4(2), 214-235.
- STEP, F. N. T. A. I., & STEP, B. ARTIFICIAL INTELLIGENCE IN INSURANCE.
- Casas Zamorano, G. (2023). Classification model applied to fraud detection within the insurance sector (Bachelor's thesis, Universitat Politècnica de Catalunya).
- Singh, M., Dubey, R. K., & Kumar, S. (2022). Vehicle telematics: an internet of things and big data approach. In Artificial Intelligence and Machine Learning for EDGE Computing (pp. 235-254). Academic Press.
- Kondapaka, K. K. (2022). Enhancing Customer Experience in Insurance Through AI-Driven Personalization. African Journal of Artificial Intelligence and Sustainable Development, 2(2), 246-289.
- Babatunde, S. O., Odejide, O. A., Edunjobi, T. E., & Ogundipe, D. O. (2024). The role of AI in marketing personalization: A theoretical exploration of consumer engagement strategies. International Journal of Management & Entrepreneurship Research, 6(3), 936-949.
- Agnihotri, A., & Bhattacharya, S. (2022). Lemonade: Artificial Intelligence-Based Value Innovation in Home and Renters Insurance Industry. SAGE Publications: SAGE Business Cases Originals.
Index Terms
Keywords