Unlock the Power of AI in Insurance: Applications & Benefits


June 19, 2024
Mathapelo Mosia

Humans have come a long way since stone tools were the most groundbreaking technological invention of our time. Today, cars are virtually self-driving, networks have upgraded to 5G (fifth generation), and a wave of AI (artificial intelligence) is upon us.

Artificial intelligence is any mathematical model that learns patterns from vast amounts of data and enables faster or even automated decisions.

AI is quickly transforming various industries, including insurance, creating more automated, time-saving solutions for businesses to use to their advantage. Furthermore, artificial intelligence helps the impact of human error and curbs subjective bias.

Instead, it offers calculated and intelligent solutions tailored to making life easier and helping business processes run smoother. 

Are you curious how this technological advancement can transform your insurance experience? Read on to discover the numerous possibilities.


  1. Transforming the Insurance Landscapesome text
    1. Practical Applications of AI in Different Insurance Sectors
  1. The Human Factor: How AI Enhances the Customer Experience
  1. Beyond the Benefits: Potential Risks and Considerations
  1. The Future of AI in Insurance: A Collaborative Approachsome text
    1. Getting Started with AI: Resources for Businesses and Consumers
  2. Conclusion: AI - A Powerful Tool for a More Efficient and Customer-Centric Insurance Industry

Transforming the Insurance Landscape

Many predictions have been made about artificial intelligence’s influence on insurance. The most popular replies seem to be more personalised policies, precise coverage (new insurance products tailored to specific needs) and pricing adjustments. 

The long-term goal of AI in insurance is to take care of tedious, repetitive tasks like classifying claims and applications. This allows human agents to have enough time to do more complex work.

AI is also said to improve fraud detection systems. It can analyse claims data to identify irregular patterns, helping insurance providers save money and reducing premiums for everyone.

But it’s important to remember that AI is only as good as the human intelligence it learns from. While artificial intelligence may offer numerous benefits, human oversight and expertise are still crucial in decision-making.

People can better understand a situation's context and specific circumstances than AI. This ensures that decisions around claim outcomes, for example, are made fairly and transparently. 

Human intervention means ethical considerations will be factored into the decision-making process.

Practical Applications of AI in Different Insurance Sectors

Artificial intelligence isn’t new in insurance; existing use cases include risk modelling, data forecasting, and contact centre operations. Many potential opportunities are in the pipeline.

Simona Scattaglia (KPMG Italy, Insurance Technology) said of the potential and impact of AI, “There are powerful AI applications for the insurance industry, and it will likely force innovation in many areas.”

Here’s a list of the practical applications of AI in insurance:

  • Usage-based insurance.

Telematics devices paired with AI can track driving habits to offer customised insurance premiums, bonuses, and rewards based on behaviour and actual risk.

  • Automated claims processing.

By analysing photos and videos of property damage, AI can estimate repair costs and expedite claims settlements.

  • Chatbots for improved customer service.

AI-powered chatbots are available 24/7 and can answer questions about policies and claims. Extra points for bots that can communicate in local South African languages, which can improve customer service and accessibility.

  • Automated underwriting.

Like claims processing, AI can streamline insurance applications by analysing data to determine eligibility and provide faster quotes.

  • Efficiency and cost reduction.

South African insurance providers constantly look for ways to improve business efficiency while reducing costs. AI can automate tasks, streamline processes, and detect fraud, making operations more efficient.

And here’s a list of specific policy applications:

  1. Vehicle insurance: by reviewing telematics data, artificial intelligence can create an individualised risk profile for motorists. 

  1. Life insurance: AI can help streamline the life insurance underwriting process, which usually involves lengthy medical examinations, by analysing medical records or lifestyle data.

  1. Health insurance: Medical aid schemes can benefit policyholders through customised health insurance plans with benefits focused on preventative care and wellness.

A table showing the practical application and benefits of AI in Insurance

These are just a few examples.  As AI technology evolves, expect even more innovative applications across the insurance landscape.

The Human Factor: How AI Enhances the Customer Experience

While existing technologies provide the level of support insurance customers previously required, artificial intelligence is said to further develop in this sector with the rampant modernisation of systems.


AI chatbots can significantly improve customer service through increased efficiency and round-the-clock availability.

Chatbot services can answer your questions while providing support outside business hours. These chatbots can respond instantly, thus reducing waiting times.

AI in insurance can also reduce an agent's workload. Chatbots can free up time for more complex customer interactions by handling routine tasks like scheduling appointments or resetting passwords.

Research has shown that South Africans are warming up to using AI to make their lives easier. 

In 2023, searches for artificial intelligence reached an all-time high, increasing by 370% from the previous year (2022) and 650% over the last five years–Thanks NVIDIA.

Some of this interest and subsequent rapid implementation of AI can be attributed to its abundance of use cases and the ensuing benefits. 

However, AI chatbots should not be treated as a replacement for human customer service agents. The best customer service experience often combines AI chatbot support and interaction with a knowledgeable human agent.

Beyond the Benefits: Potential Risks and Considerations

What’s a revolution if it's not accompanied by scepticism? Risks and challenges often accompany each new technology, and artificial intelligence is no different.

AI holds immense potential for the insurance industry, but significant concerns remain about bias in underwriting decisions and the overall fairness of these automated processes.

Datasets train AI algorithms; if this data contains inherent biases, such as historical underwriting practices that discriminate against specific demographics, the AI model will have similar biases.

The effect will be unfair outcomes, like higher premiums or even denials of coverage.

While lower premiums and personalised policies are lovely, what matters to consumers is a sense of purpose, ease of use, and transparency of AI models. Therefore, a lack of transparency can make it challenging to identify and address potential biases within the system.

If the insurance industry is perceived as unfair or biased, it can erode public trust and confidence in the system.

Additionally, there are concerns about data security and privacy and whether insurers can ensure that customer data is collected, used, and stored according to regulations and with your consent.

Insurance providers must aim to protect sensitive customer data from breaches and unauthorised access.

Another potentially anxiety-inducing part of integrating AI and machine learning is the effect on the insurance industry’s workforce. Automation may lead to job losses, particularly for tasks like data entry and claims processing. 

Either that or the existing roles will experience a dramatic change. 

New opportunities will likely crop up, but retraining programmes may be needed to better equip workers with the necessary skills for these new roles.

The Future of AI in Insurance: A Collaborative Approach

It’s claimed that artificial intelligence is poised to make insurance processes such as claims, customer service, fraud detection, and underwriting much more seamless. 

Insurers are already using LLMs (language learning models) such as ChatGPT to automate code generation and analytics processes. AI can handle repetitive tasks like data analysis and initial risk assessment, which allows human experts to focus on complex cases that require judgment and experience.

The idea of humans and machine learning working side by side aligns with OpenAI’s CEO Sam Altman’s sentiments. He said, “Generative AI is not a replacement for human creativity, but rather a tool that can augment and enhance it.”

Ultimately, people will set the parameters for algorithms, monitor their performance, and make final decisions on insurance matters that aren’t so straightforward.

Back-office operations are another area that stands to benefit significantly from the integration of AI. 

Back-office operations comprise administration and support personnel who aren’t client-facing. They include risk management, claims processing, and regulatory compliance.

AI’s effect on the functions mentioned above is set to make the processes faster, more efficient, and less prone to errors.

Additionally, AI can analyse historical data while monitoring emerging trends to predict potential risks and help insurers develop better risk management strategies.

Getting Started with AI: Resources for Businesses and Consumers

Case studies, blog articles, white papers, and webinars are great starting points and can provide insight into AI's capabilities and commercial applications. 

Here is a list of insightful articles you might find useful (and even helpful):

Many insurance companies have also conducted research on the subject. This information is typically found on their websites and can answer questions about how they use AI in their policies and practices.

Conclusion: AI - A Powerful Tool for a More Efficient and Customer-Centric Insurance Industry

There’s a reason AI advancements generated the buzz they did; it just means we’re one step closer to making our sci-fi dreams a reality. Things we only saw in movies are on the cusp of becoming a reality, fuelled by AI.

The future of insurance, powered by artificial intelligence, promises a smoother experience for customers. This powerful technology offers a glimpse into a future with faster, more efficient processes and personalised insurance experiences.

Still, there’s no ignoring the risks associated with this latest development. 

Concerns around bias and data security exist and are valid. This is why a collaborative approach where AI complements human expertise can ensure fairness and trust. 

And until the dawn of machinery is entirely upon us, Pineapple has found ways to save on your comprehensive car insurance policy today. 

Rest assured that we’re implementing AI into our processes responsibly and gradually. 

Using our app, you can insure your valuables with the snap of a picture. Our AI engine will then identify the item and allow you to purchase the recommended monthly premium easily.

Get a quote now and enjoy affordable premiums!

Please Note: The information provided above is for informational purposes only; you should not construe any such information as legal or financial advice. 

Pineapple (FSP 48650) is underwritten by Old Mutual Alternative Risk Transfer Insure Limited, a licensed Non-Life Insurer and authorised FSP. T&Cs apply.

Learn more about AI in insurance by reading our other blog articles: The Future Of Car Insurance In South Africa: How AI Is Revolutionising The Industry and Personalised Car Insurance in South Africa: The AI Advantage.

Mathapelo Mosia

Mathapelo, Pineapple's Junior Copywriter, has a diverse background, including roles like Leaflet Distributor, Bridal Stylist, and Junior Sales Activation Officer. Her love for literature was sparked in grade 5 by a teacher's challenge involving books and chocolate. Though the prize was never received, she developed a passion for reading and writing.

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Please Note: The information provided above is for informational purposes only; you should not construe any such information as legal or financial advice.

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