Consider, for example, that Americans who live past the age of 70 can expect on average to spend $172,000 for long-term care over their lifetimes.¹ But most families (as many as 83%²) say it would be impossible or very difficult to afford $60,000 for annual in-home or assisted living care expenses.

Life and health insurance companies are working to help bridge this ever-widening gap with long-term care insurance (LTCI). And thanks to a broad range of new innovations enabled by AI, Microsoft and our partners are helping to improve LTCI for policyholders and insurers alike. This is part of our vision for intelligent insurance and our work with Microsoft Cloud for Financial Services. 

In this case, helping to make long-term care more accessible and affordable is good not just for enhancing societal well-being and reducing the strain on public resources, but also for the viability of a critical insurance product.

The unique challenges of long-term care insurance

LTCI insures people for a very costly circumstance that is very likely to occur.

About 70% of seniors will require long-term care at some point in their lives,³ and Americans spend more than $471 billion annually for long-term care.⁴ Yet Medicaid covers only 42% of long-term costs. LTCI aims to address a significant portion of long-term care costs by covering a range of services for people who need assistance with daily living activities—for example, bathing, dressing, and eating—over an extended period, often provided at home.

Despite the prevalence and urgency of the need, however, LTCI has proven challenging for insurers. Rising healthcare costs and higher-than-expected claims have created unforeseen financial pressures. People are living longer, increasing the likelihood of needing to use LTCI, and fewer customers than expected are letting their policies lapse. For insurers, this results in profitability challenges and uncertainty, while customers face higher premiums, and thus reduced access.

How AI can help improve LTCI profitability and growth

The success of insurance companies in addressing the growing need for LTCI will depend on a variety of factors, including education, awareness, and the efficiency and effectiveness of regulation. Above all, technology holds the key for transformation in profitability and growth.

We are seeing tangible results in AI innovation with our insurance customers worldwide that have direct relevance for LTCI providers. These potential benefits are prompting many insurers to accelerate their cloud migration and data management investments—a transition that is key to the LTCI sector, which lags other insurance segments. With the scale, security, and resilience of the Microsoft Cloud combined with the advanced data and analytics capabilities of Microsoft Fabric and the AI development opportunities enabled by Azure AI Studio, insurance companies can innovate rapidly and confidently to meet their specific needs.

The future of insurance in the era of AI

Read the e-book u0026gt;

Here are some of the important benefits that insurers can apply to their LTCI offerings.

Enhance underwriting and claims management

AI can streamline underwriting and claims processing in ways that improve both accuracy and efficiency. One important area of focus is straight-through processing (STP)—the automation of an entire workflow, from the initial data entry to the final decision, without the need for human intervention. STP helps to reduce delays, minimize errors, and free up valuable human resources.

In the underwriting process, AI helps enable STP for tasks such as analyzing historical data, assessing risk factors, and predicting the likelihood of claims, which helps underwriters make more informed decisions and reduces the time required for manual reviews. It can also handle a larger volume of applications without a corresponding increase in resources.

In claims processing, STP can automate the assessment and triage of claims—for example, by quickly extracting and analyzing information from a wide range of documents, including medical records, policy applications, and claims forms. Many insurers have long used optical character recognition (OCR) technology to digitize these types of documents. But the addition of generative AI supercharges how they can be understood, evaluated, and acted upon.

Automate contact center experiences

With generative AI’s natural language processing and content creation capabilities, insurers can optimize contact center operations in ways that help both the customer and the company.

AI-enabled copilots and virtual assistants can handle larger volumes of routine inquiries, helping agents and customer service representatives provide faster, more accurate responses to policyholders’ questions about coverage, claims status, and more. For example, John Hancock implemented a new AI solution to provide support for common customer issues and questions, which helps call center representatives focus their efforts and expertise on the most complex cases, with better customer experiences and reduced wait times.

Automated systems can understand and respond to customer inquiries in a conversational way, and even authenticate caller identities with voice biometrics, streamlining the identification process and enhancing security. For LTCI, AI can enable corresponding benefits through more efficient operations, better resource allocation, and enhanced customer experiences.

Prevent fraud, waste, and abuse

In the realm of fraud detection, advanced analytics and AI-powered tools can analyze vast amounts of data from healthcare vendor invoices to identify patterns and anomalies indicative of fraudulent activities in a timely manner. With better insights, insurers can proactively detect and prevent fraud, helping ensure that legitimate claims are processed swiftly while minimizing financial losses.

AI can also help insurers identify unusual patterns or anomalies that could indicate fraudulent or wasteful activities, such as flagging a particular facility if it consistently submits higher-than-average claims for certain treatments. Analyzing historical data can also help inform insurers to create more robust, data-driven processes to determine which facilities to audit or to benchmark best-in-class operators.

Expedite regulatory, contracting, and auditing activities

LTCI is inundated with regulatory, contracting, and auditing activities, many of which rely on cumbersome manual processes. AI can improve the efficiency of many of these workflows while also improving accuracy, turn-around times, and regulatory compliance. Data validation, risk assessment, and regulatory monitoring can all benefit. Moreover, AI’s predictive analytics can spot potential compliance issues, and its enhanced reporting capabilities can aid strategic decision-making.

Advancing LTCI with AI and Microsoft

We believe that with focused, creative innovation with AI, LTCI providers and their customers can look forward to a bright future in which more people can live with dignity and financial security in their senior years, thanks to high-quality, robust insurance products and services. We are excited to work with industry and our global partner ecosystem to strengthen LTCI, in line with Microsoft’s responsible AI principles and our Secure Future Initiative. 

To learn more about all our solutions, visit our Microsoft Cloud for Financial Services website.

¹AARP, “Long-Term Care Costs May Double to $5.6 Trillion by 2047,” March 2018.

²KFF, “The Affordability of Long-Term Care and Support Services: Findings from a KFF Survey,” November 2023.

³Morningstar, “100 Must-Know Statistics About Long-Term Care: 2023 Edition,” March 2023.

⁴A Place for Mom, “Long-Term Care Statistics,” September 2023.

The post How AI is improving long-term care insurance for insurers and customers alike appeared first on The Microsoft Cloud Blog.

Back in June 2023, Sasha Sanyal, Microsoft Global Insurance Leader, blogged about the unprecedented excitement among insurance customers over the promise of generative AI. Customers were inspired by Microsoft’s vision for intelligent insurance and how the Microsoft Cloud and our global partner ecosystem were providing opportunities to build solutions that could not just deliver efficiencies but also create industry-changing competitive advantages.

Today, many visions are on their way to becoming powerful realities. The level of interest and creativity we’ve seen from insurance customers has been off the charts. Working alongside our partners, we have been more than busy brainstorming with business leaders and technology teams, hacking solution concepts, and collaborating with customers to build differentiating capabilities.

Microsoft Cloud for Financial Services

The future of financial services in the era of AI

Explore capabilities

Use cases help to drive AI innovation in insurance

Central to our exploratory engagements with insurance companies is the challenge of finding effective use cases—real-world scenarios that identify specific business problems and define how capabilities or features can be implemented to deliver measurable results in solving them. A good use case can serve as a north star to help in the design, development, and measurement of a solution. And because a use case is tight and distinct, it can help a customer make fast, efficient, and insightful early investments in experimenting with generative AI. Out of our customer deep-dives, a set of distinctive use cases has emerged that we recognize as especially worthwhile for insurance companies as they take their first important steps on their AI journeys.

Context is important here. Above all, insurers are anxious to use generative AI to transform their businesses in virtually every aspect of operations, customer engagement, and product innovation. They see, for example, the potential of content generation to write automatic responses to customer inquiries, of summarization to assist in producing support conversion logs or financial reports, of semantic search to enable fast information discovery and knowledge mining, and code generation to convert natural language to structured query language (SQL) (or vice versa) for telemetry data. This list barely scratches the surface of what’s possible.

Insurance customers are choosing Microsoft Cloud for Financial Services because it provides enormous flexibility and control in creating solutions based on an organization’s unique needs. For companies that want to build their own generative AI solutions, Microsoft Azure OpenAI Service brings together advanced models from OpenAI with the enterprise capabilities and advanced security of Microsoft Azure. AI is also being integrated into the Microsoft Cloud and in the Microsoft products that customers already use and love, including the upcoming Microsoft 365 Copilot, which will create and edit documents, presentations, and emails.

Top generative AI use cases for insurance companies

In considering options to deploy generative AI, insurers and other risk-sensitive companies are starting with use cases that can help them learn without creating risk for customers and clients. Where generative AI is being used to generate content, humans need to be in the loop to review output and ensure compliance. Still, these early-horizon requirements leave plenty of room for innovation in early deployments.

 Three categories of use cases are gaining traction with customers today:

1. Helping deliver meaningful and engaging customer experiences

Generative AI can have a tremendous impact in transforming each phase of the insurance customer journey.

• In the discovering and exploring phase, company agents can receive automatically generated notes and recommendations following a customer call, or produce tailored, auto-generated emails to follow up on issues or opportunities.
• In the buying and using phase, agents can generate scripts to drive conversations based on customer profiles and conversation histories.
• In the asking phase, agents can automate follow-up activities or retrieve fast knowledge-based responses to customer queries, in simple terms.
• In the engaging phase, agents can be alerted to birthdays or other important customer moments and generate tailored emails and messages to nurture relationships.

2. Driving efficiencies in corporate functions

Generative AI will potentially change the way people work in insurance, impacting core function across the business.

• In contact centers, the ability of customer service representatives to respond faster and more effectively will be enhanced through capabilities that enable streamlined workflows such as automated follow-up on emails and the ability to search and retrieve knowledge-based information in contextualized natural language.
• In human resources, the ability to attract and retain high quality candidates will be enhanced with tools that more effectively screen resumes, engage candidates through the hiring process, and deliver the knowledge that new employees need to do their jobs from day one and beyond.
• In legal, the ability to help attorneys and support staff to work more efficiently will be enhanced with tools that generate legal and regulatory summaries and assist with compliance and other specific challenges.  
• In marketing, the ability to connect with key stakeholders and tell the brand story will be accelerated by AI-generated ideas for content across channels and personalized, targeted email campaigns to promote products or services to specific audiences.

3. Creating copilots for each phase of the insurance life cycle

For virtually every aspect of the insurance life cycle, there is an opportunity to enhance experience and add value through a copilot—an application that uses generative AI and large language models to assist with complex tasks and offer a suggested course of easily executable action. Insurers are exploring early generative AI use cases across the business. For example:

• Customer copilots can help customers find the information they need about policies and services across a variety of web and mobile interfaces.
• Underwriter copilots can help underwriters augment decision-making with automatic summaries of applications and policy documents.
• Claims examiner copilots can help claims managers evaluate filings, process settlements, extract data from documents, or facilitate data entry.
• Actuarial copilots can help actuaries expedite trend analysis and automate mundane tasks.

Get engaged now on your generative AI journey

Now is the time for insurers to evaluate and experiment with AI, as it is revolutionizing how insurers assess risk, process claims, interact with policyholders, and empower employees.

We invite you to learn more by contacting your Microsoft representative or solutions partner. Or, for those who plan to attend InsureTech Connect (ITC) from October 31 to November 2, 2023, in Las Vegas, Nevada, we invite you to meet with us in person at Mandalay Bay’s South Convention Center, Lagoon L, where we will showcase the use cases and capabilities that we and our partners are bringing to market. In addition, Microsoft leaders will be presenting at the event in main program and partner sessions on key topics in the industry, including the following:

• Data-Smart Life & Annuities: Embracing ChatGPT and AI for Insurance Transformation—Jeffery Williams, Director, Insurance Digital Strategy, Worldwide Financial Services, on Tuesday, October 31, 2023, from 2:20 to 3:20 PM PST in Mandalay Bay Ballroom J.
• Microsoft: Embracing Open Insurance: Unlocking Opportunities within Distribution— Sasha Sanyal, Worldwide Financial Services, Americas Regional Leader, on Wednesday, November 1, 2023, from 2:40 to 3:00 PM PST in Mandalay Bay Ballroom F; and “Women’s Leadership Forum,” Wednesday, November 1, 2023, from 3:00 to 5:00 PM PST in the Foundation Room.
• How AI Is Changing the Way We Operate in Insurance—Jim DeMarco, Insurance Practice Lead, on Thursday, November 2, 2023, from 12:30 to 1:30 PM PST in Mandalay Bay Ballroom G.
• Automating the Submissions Intake Process with AI to Drive Better Decisions and Better Outcomes (Presented by Indico Data)—Tom Wilde, CEP, Indico Data, and Naveen Dhar, Director, Insurance Digital Strategy, Worldwide Financial Services, on Thursday, November 2, 2023, from 2:40 to 3:00 PM PST, Reef A-F.

Next steps

You can learn more about how Microsoft Cloud for Financial Services is helping our customers realize the future of insurance in the era of AI, unlocking business value, and deepening customer relationships.

The post Insurance in the era of generative AI: Use cases that transform the industry appeared first on The Microsoft Cloud Blog.

It’s easy to wonder if the challenges the insurance industry faces in 2023 outweigh the opportunities.  

Economic headwinds, new competitors, regulatory demands, and the lingering effects of COVID-19—it all adds up to one of the most difficult environments in recent memory. Nonetheless, I encourage insurers to see this as a time for optimism. Companies that have invested in strong digital foundations are weathering the storm and are in a good position to capitalize on new opportunities.  

In my conversations with customers, the number one theme I hear for 2023 is that insurers need to do more with less: more innovation with less time, more agility with less money, and faster processes with less risk.  

These goals (and more) are attainable, but the right digital strategy is critical. Looking forward, I see five priorities that every insurer should keep in mind: 

1. Leverage the cloud to digitize the business. Customers expect seamless omnichannel experiences as they engage with you on the web, via their smartphones, or with agents. Partners (agents, brokers, and affinity) want stronger integrations with you to create comprehensive views of their customers (who are ultimately yours) and to align your business strategy with theirs. The best way to meet these types of new demands is to tap into the benefits of the cloud. The good news is that most companies are well into their digital transformation journeys. Insurers like AIA invested in large-scale infrastructure modernization and are now not only reaping major benefits in cost savings, sustainability, and customer experiences but are positioned to do more with less as they create new digital capabilities and harness the power of AI. 

2. Deliver efficiency with AI. Competition in the insurance sector has intensified as industry leaders keep raising the bar on the customer experience with innovative digital solutions. And, of course, insurtechs are upending traditional industry practices with a digital-first mindset to deliver entirely new products and services that customers often love. To not just survive but thrive, insurers need to differentiate their products and services, without breaking the bank. This is where AI can help. AI and data analytics can improve efficiency and customer satisfaction by automating and streamlining processes such as underwriting and claims. And it can help create differentiated solutions that speed service delivery and impact. To cite just one example, Progressive is using AI-powered chatbots to save USD10 million every year as their bots answer up to 200,000 queries each month with personalized, intelligent, text-based responses. The potential of AI is astonishing, and Microsoft is committed to delivering on its promise in ways that are both impactful and responsible. 

3. Innovate with a cloud developer platform. One of the most important requirements of digitally transforming core insurance systems is to bring new solutions and services to market in better and faster ways. This is another area where AI is delivering amazing benefits. AI is redefining the very idea of an application and changing the way people build software. For example, with GitHub Copilot, AI is employed to turn natural language into coding suggestions and entire functions—in real-time, directly from the editor. Copilot draws context from the code a developer writes to offer recommendations for completing lines and even suggesting entire functions. Just as with the rise of compilers and interpreters, AI-assisted coding is poised to fundamentally change the nature of software development, giving developers a new tool to write better code, more easily. Developers using GitHub Copilot see a 55 percent productivity boost when working on real-world projects and tasks.¹ And, as Gjensidige, Norway’s largest insurance company has seen, a modern “DevSecOps” environment also puts security front-and-center, without impeding developer velocity. 

4. Reenergize your workforce. It’s not only customers and partners who want digital experiences. Your employees expect them too. After all, when they’re not at work they’re customers themselves, and they know what a great digital experience is when they see it. For employees to thrive and build commitment to the business, they must be empowered and energized to do meaningful work. That’s what Microsoft 365, Microsoft Teams, and Microsoft Viva are all about, as Nationwide experienced when they built a hybrid work environment for their global workforce of 25,000 associates, and saw improvements in collaboration, flexibility, and employee wellness. Microsoft 365 delivers a cloud-first experience that makes work better for the new normal of today’s digitally connected, broadly-distributed workforce. Microsoft Teams provides an enterprise-scale platform for meetings, calls, chats, collaboration tools, and more. And Microsoft Viva connects the company from the frontline worker to the CEO with a complete system for delivering actionable insights and feedback, aligning organizational goals, and enabling the learning of new skills so that everyone can work together to achieve great business outcomes.  

5. Protect everything, everyone, everywhere. Last, but not least, is security. This is a top priority for every insurer, as both the pace and sophistication of cyberattacks continue to accelerate. Many chief information officers (CIOs) and chief information security officers (CISOs) can attest to the cost and complexity of effective protection, especially as the company digitally modernizes. The more connected your business gets, the faster a bad actor can move laterally through the enterprise and wreak havoc. The more agile operations become, the more your security teams struggle to manage risk. Your objective should be to ensure that new solutions are built with security at the core, not as an add-on. For example, when Zurich Insurance implemented a new suite of bookings and productivity solutions built on Microsoft technology, they also realized enhanced security and better compliance with regard to General Data Protection Regulation (GDPR) requirements. Security is baked into Microsoft offerings. And our enterprise solutions for identity and access, endpoint management, blocking incidents, and delivering security analytics and threat intelligence are all key to helping you protect your business. 

New technology will drive innovation across your value chain

As you move through 2023, don’t moderate your digital strategy due to uncertainty. Instead, view the unprecedented array of new technology options as a stabilizing force that can help you create product and service differentiation. In a competitive marketplace, you can drive new efficiencies across your value chain, especially in areas like automated underwriting and touchless claims. And sentiment analysis and data insight technology can help your employees win with customers and help you manage talent amid shortages. Finally, the right technology will help you create value for your customers by simplifying and digitizing their experiences with you, in ways that become progressively better.  

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Learn more about how Microsoft can help you differentiate your business today and build the digital insurer of tomorrow.

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Reduce cost of operations, support new business models, and enhance integration with partners to accelerate services to meet customer expectations.

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¹GitHub, Research: quantifying GitHub Copilot’s impact on developer productivity and happiness, The GitHub Blog, September 7, 2022.

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