Insurers confront privacy risks in AI fraud fight
AI is revolutionizing the insurance industry, and though the switch to automated fraud detection is beneficial, it also brings up issues regarding ethics and data protection among the insurers.
With the help of artificial intelligence, the insurance sector has been moving from reactive fraud detection systems to the point of preventing fraud in real-time and even predicting it. However, the whole industry is now facing the dilemma of how to maintain privacy and of being held accountable in an ethical way, as the trend towards automatic claims processing and inter-policy analysis becomes stronger.game-khelo.com
Roopa Malhotra, who is responsible for the Customer and Digital division at Zurich Insurance in the Asian Pacific region, characterized the change as “a significant change in the way fraud is detected by the insurers.” Malhotra quoted AI as “a transition from rule based systems to learning based models which are able to detect suspicious behavior as it happens.”
With the help of AI, companies can now analyze enormous amounts of both structured and unstructured data—from claims forms and invoices to images and geolocation data—” finding similar patterns in these various forms of data, which human experts or older systems could not have seen,” she explained.
Moreover, the technology is the reason behind the inter-policy insights as one of the insurance line’s fraud alert is sent to others. According to Malhotra, the time has come when “the whole process has become agentic AI—fully automated.”
For senior customer success manager at Shift Technology, Hoe Seng Chia, the purpose of the adoption of AI is a virtuous circle in society. “We are really working here for the better of society. It is simply to safeguard the honest policy holders and make sure that…claims which are legitimate…get paid out on time and in the right manner,” he stated. Also, keeping the premiums low and having a sustainable claims loss ratio, he mentioned, are key factors for insurers’ long-term existence.
Despite this, both the experts are in agreement that trust is the major factor for AI’s success. “AI and data privacy have to move at the same pace. The development of one cannot be done responsibly without the other,” Malhotra opined.
In the same light, Chia mentioned that insurers are forming internal compliance units “to demonstrate and build trust that…there is no bias in our models,” thereby underscoring the industry’s commitment to ethical and transparent AI adoption.
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