Personalizing Policies with AI: Improving Customer Experience and Risk Assessment
DOI:
https://doi.org/10.63282/3050-9246.IJETCSIT-V4I1P110Keywords:
Artificial Intelligence, Personalized Insurance, Customer Experience, Risk Assessment, Machine Learning, Deep Learning, TelematicsAbstract
Artificial Intelligence (AI) implementation in the insurance industry is transforming the approach to policy designing, pricing, and delivery. In this paper, the expanding use of AI in personalizing insurance coverage to improve customer experience and minimize risk assessment will be examined. Static insurance models based on database and a generalized form of risk tends not to respond to the dynamic demands of modern consumers. Conversely, machine learning, deep learning, and big data analytics use in AI-driven systems enables behavioral, demographic, and environmental data to be assessed in real-time. Such insights can empower the insurers to develop offers of policies much more precise and relevant in terms of coverage and price. Customer interactions are also changing into real time connections, predictive suggestions, and responsive communication techniques by AI. Personalization has been applied in health, auto, and property insurance that has resulted in customer satisfaction, more effective risk modeling, and enhanced operational efficiency. Case studies in 2023 reveal how insurers are using AI to optimize policy components and provide quantifiable results as shown with use of case studies of Oscar Health and other telematics-based automotive companies insurance. Nevertheless, obstacles like privacy of personal data, regulatory enforcement, transparency in the models and ability to scale systems remain. The concluding section of the paper discusses the avenues of future research to facilitate the further development of research in the field of AI to make it more explainable, fair, and able to adapt to the environment of the insurance environment. In general, the intersection between AI and personalization is establishing new benchmarks on the way insurance products are made, distributed and presented
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