Artificial Intelligence (AI) appeared on our radar a couple of years ago. Since it frequently appears in the media, more of us are using it in our everyday lives. Need help to avoid paying an unexpected parking charge? ChatGPT can assist!
Whether it still has the potential to take over your desk neighbour’s job is still questionable. Yet this predictive text generator (times a billion) is making its mark in the travel insurance industry.
At P J Hayman, we believe that it is nice to communicate with a human being. Who can display empathy – when needed – or a witty solution with a charismatic tone of voice, rather than typing a message into a machine, which spits out lines of text – often recited in monotone! Machines, AI apps, and devices do not understand tone of voice, they simply state the knowledge that is requested.
We continue to pride ourselves on the knowledge of our team, who are often referred to as friendly and empathic by our customers. Sometimes, customers are so happy with the service that they receive that they wish to hug our teammates.
Chatbots remain unhuggable (unless Jellycat chooses to diversify). So, two years on from our first insights on AI, we have done further research to answer: How is AI benefiting the travel insurance industry?
How is artificial intelligence being used in the travel industry?
Artificial Intelligence, machine learning, and Big Data
As travellers, we wish to make simple but competent decisions about when, where, and how much a trip will cost. Thankfully, the technology is out there to provide the answers. Whether it’s by discovering the latest travel trend that’ll suit our interests. Or by sourcing the most cost-effective holiday package. There are mathematical and predictive models that can assist. For instance, comparison/travel websites can provide different offers to suit our lifestyles, and offline travel agents can use self-developed algorithms to suggest trips for people according to their wants/needs.
ChatGPT
Most travel insurance companies like to share travel advice/tips with travellers such as what to expect in a foreign country and how to plan for the unexpected – before and during a trip. Some insurers have invested in travel apps. The apps can teach us about the risk of fraud and illnesses we may be exposed to but, overall, how to travel safely and intelligently. However, ChatGPT has an intelligent way it can help us plan adventures too!
Expedia and Kayak were some of the first travel websites to add ChatGPT plugins to their websites. More have followed.
ChatGPT and Bing Chat
Soon, everyone will be able to choose “Search with Bing” while using ChatGPT’s chat platform because ChatGPT’s search mode is Bing. With time, we’ll have the most up-to-date information in real-time at our fingertips. All sourced from across the world wide web. Also, the answers we reap from ChatGPT will be backed up by search and web data. This will allow us to save references we may not have used before, while learning more on the go.
Artificial intelligence and the claims process
We are open and honest about our claims process at P J Hayman, humans conduct it. Yet, in Canada AI integration in travel insurance claims is in the preliminary stages of adoption. AI has the potential to secure patient satisfaction and fiscal prudence in travel insurance.
“Many major insurance companies, Insurtech startups and third-party administrators (TPAs) are beginning to incorporate AI to streamline the traditionally lengthy claims process, reduce administrative costs, improve customer satisfaction and enhance claims cost management… prior to a claim would be the best place for intervention that would be both a service and helpful for cost avoidance”.
(Dr Ferial Ladak, Director of Global Medical Affairs for Global Excel, based in Quebec, Canada).
The positives of using Artificial intelligence in the travel insurance industry
AI can be used to improve how travel insurance policies are made, maintained, and delivered.
We asked Jon Mainwaring, Head of Business Development, what his thoughts were on this point. He said: “AI can be used to improve customer journeys in the quote & buy process, making it more of a conversation with a chatbot rather than a questionnaire completing exercise. This will allow more tailored cover for the traveller who may have specific needs and requirements. AI can also be used to streamline claims processes. For less complex claims, such as flight delays and lost luggage, there is often little need for human intervention. Customers expect digital experiences now, and we need to give them the choice.”
AI can detect and manage fraud.
More advanced AI systems are being created to detect fraudulent schemes such as identity theft and payment fraud. While working alongside machine learning, AI can pull out suspicious transactions and behaviour patterns from flowing streams of data in real time. As a result, anything unusual can be investigated by a human, and procedures can be put in place to prevent businesses from losses.
As humans, we may have the intelligence to notice when something is out of character. However, not as quickly as AI. This is why it is powerful. AI quickly analyses and processes a large amount of data to identify unique patterns and irregularities that are difficult for us to detect before adapting quickly to again pinpoint new types of fraud.
An insurer can maintain competitive pricing
On a comparison website, your travel insurance policy will sit among competitors, each with its own pricing model. You may be able to see what *GoGoTravel* is quoting compared to *TravelWithFreedom*. However, AI has the power to watch conversions and adjust prices live – in real time, not by a human – when they can – but at any time of day/night when they need to be adjusted to remain competitive.
AI Powered Doctors and Automated Medical Screening Tools
Online medical screening tools can now access an individual’s medical conditions within each transaction. In response, the insurer, broker, or aggregator is provided with the risk outcome. In the short term, this provides accurate underwriting, and in the long term, if a provider sells everyone a policy at the correct price, outgoing claim costs should be lower.
Artificial Intelligence is Labour Saving
From a customer service point of view, AI technology has created a number of labour-saving devices to serve customers, such as Chatbots. A Chatbot can talk to you in real time – when you need it – whether you’re in your own home and need a quick quote or, if you’re in another country.
For instance, if you’re off the beaten track and require medical assistance, you could ask an AI Doctor via Mobile or Smart Watch for healthcare advice to relieve stress and discomfort before reaching a hospital.
As we know, the knowledge AI has is huge, so it’ll provide some useful solutions before you see a medic.
The negatives of using Artificial Intelligence in the travel insurance industry
While artificial intelligence (AI) offers numerous benefits to the travel insurance industry, there are also potential negatives to consider. Here are some of the drawbacks associated with the use of AI in this context…
1: No human involvement can create challenges.
While the insurance industry is no stranger to using computer algorithms to evaluate and make decisions on claims with a simple verdict, if AI is responsible for creating logic (after analysing a pool of data), this may create more challenges for insurers. For instance, a court might not accept that AI logic unearthed the correct answer for an insurer’s final decision. Furthermore, during sensitive cases, such as claim denials or adjustments, a thorough understanding of a traveller’s circumstances is paramount.
2: Lack of Human Touch
One of the primary concerns is the potential loss of personalized customer service. AI systems, although capable of automating processes and providing quick responses, may lack the empathy and understanding that human interaction can offer. Some customers may prefer speaking with a real person when dealing with complex or sensitive insurance matters.
3: Data Privacy and Security
AI relies heavily on data, and the use of customer information in AI systems raises concerns about data privacy and security. Travel insurance involves handling sensitive personal data, including medical history, travel plans, and financial information. If not properly secured, this data could be vulnerable to hacking, breaches, or unauthorized access, leading to privacy concerns and potential misuse of personal information.
4: Bias and Discrimination
The AI systems are only as good as the data they are trained on, and if the training data contains biases, it can lead to discriminatory outcomes. In the travel insurance industry, this could result in unfair premium calculations or claim denials based on factors such as age, gender, or ethnicity. Addressing bias in AI algorithms is a significant challenge that requires ongoing monitoring and evaluation.
5: Lack of Transparency
AI algorithms can be complex and difficult to interpret, making it challenging to understand how decisions are made. This lack of transparency can be a concern in the travel insurance industry, as customers may not fully understand why a claim was denied or why a particular premium was assigned. The opacity of AI systems can erode trust and make it difficult for customers to appeal decisions or seek redress.
6: Limited Contextual Understanding
AI systems excel at processing vast amounts of structured and unstructured data, but they may struggle with nuanced contextual understanding. Travel insurance claims often involve complex scenarios, unique circumstances, or subjective assessments. AI may struggle to accurately interpret such situations, leading to misjudgements, incorrect claim assessments, or suboptimal policy recommendations.
It is important to note that these negatives are not inherent to AI itself but rather potential pitfalls that need to be addressed through careful implementation, ongoing monitoring, and robust regulatory frameworks. Responsible and ethical use of AI can help mitigate these concerns and ensure that the benefits of AI in the travel insurance industry outweigh the negatives.
Will P J Hayman be using AI?
The capabilities of AI are impressive. For instance, the previous paragraph you read from points 2 – 6 under “The negatives of using Artificial intelligence in the travel insurance industry” was entirely generated by AI. However, point 1 was written by Suzanne!
In the travel insurance industry, AI is already being utilized, particularly in pricing policies. This technology holds significant potential when schemes, rating, and pricing can be complex due to the unique characteristics of travellers.
Thoughts from our Customer Services Manager
Integrating AI into PJ Hayman offers numerous advantages, including increased efficiency, 24/7 availability, personalised experiences, and quick information retrieval.
However, it is crucial to balance these advantages with the potential disadvantages, such as the lack of human touch, limited contextual understanding, technical limitations, and data security concerns.
Ultimately, finding the right balance between AI and human involvement is key to delivering exceptional customer service in the travel insurance industry.
Thoughts from our Technical, Compliance & Complaints Manager
I think there is a danger in using advanced AI on websites. For example, the app or websites that predict what you want because you bought holiday or flight online or your current location shows you are in an airport. Giving you quick and easy access to a travel product, without really having to think about it.
How many of us are guilty of just ticking the T&Cs just to get to the next page?
Travel insurance contains certain exclusions, especially when it comes to health and existing medical conditions, that must be read and understood before travelling. So, taking time to read the documents is really important.
We’ve seen many examples recently in the press of travel insurance not being adequate for the customer’s needs due to lack of understanding of the policy and cover, leaving the customer and their families being stranded overseas. Sometimes without assistance and mounting medical bills.
At P J Hayman, we supply our customers with all the information they need to ensure they can make an informed decision on what they are buying, and we do this with clear guidance on our websites and a helpful customer service team.
What are your thoughts on how AI can benefit the travel insurance industry?
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