As the coronavirus pandemic continues to cause mayhem, businesses will be forced to recalibrate their spending priorities. Insurers are expected to ramp up investment in AI during the time of Covid-19 in a bid to automate and speed up claims processing.

According to GlobalData’s latest Quarterly Tech Trends Survey, 67% of firms in the insurance industry are currently using AI. Although 90% of firms believe that AI will have a disruptive influence on the sector, its adoption remains lower than that of several other prime technologies, including cloud computing (83%), big data (78%), and the Internet of Things (70%).

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At a time when insurers are moving towards discontinuing the sale of products and waiving deductibles, the adoption of technology such as AI, which offers the prospect of operational savings and efficiencies, is likely to captivate the industry’s interest.

Although the application of AI is broad and may be used across different areas of the insurance value chain, investments in this technology are expected to focus on speeding up claims and detecting fraud.

So far, the coronavirus outbreak has resulted in a spike in the number of claims across several business lines, including travel insurance and business interruption policies. In addition, financial hardship could result in more fraudulent claims.

Indeed, AI enables faster and more accurate processing of customer data, making the identification of fraudulent claims more straightforward as well as improving risk assessments. Moreover, AI virtually eliminates the need for any face-to-face contact between customers and agents to submit claims. As social distancing measures remain in place, submitting claims digitally has become paramount.

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However, findings from GlobalData’s Quarterly Tech Trends Survey indicate that the technological integration of AI is seen as one of the greatest barriers to its adoption, possibly owing to legacy systems characterising much of the industry. As such, 76% of firms indicated that they would prefer to partner with tech providers for AI expertise. Anticipating that insurers would seek to streamline their claims processes amid the pandemic, insurtech Pact Global recently launched an AI-powered Claims-as-a-Service platform to speed up claims processing and reduce claims.

Meanwhile, start-up Sprout.ai has raised $2.5m in a second seed funding round to fast-track the rollout of its claims platform, which promises insurers the ability to settle claims within 24 hours.

Covid-19 is bound to accelerate the use of AI in claims processing regardless of whether insurers opt to invest directly in the technology or through partnerships. These investments will ultimately benefit customers through more streamlined processes, faster claim resolutions, and quicker payouts.