When folks can now not carry out the on a regular basis actions of life with out some form of help, the clear precedence ought to be to make sure their well being and dignity. Cash shouldn’t be a prohibitive issue. But in too many instances, high quality long-term care is hindered by monetary considerations.
Contemplate, for instance, that Individuals who dwell previous the age of 70 can count on on common to spend $172,000 for long-term care over their lifetimes.1 However most households (as many as 83%2) say it might be unattainable or very tough to afford $60,000 for annual in-home or assisted residing care bills.
Life and medical insurance corporations are working to assist bridge this ever-widening hole with long-term care insurance coverage (LTCI). And due to a broad vary of recent improvements enabled by AI, Microsoft and our companions are serving to to enhance LTCI for policyholders and insurers alike. That is a part of our imaginative and prescient for clever insurance coverage and our work with Microsoft Cloud for Monetary Providers.
On this case, serving to to make long-term care extra accessible and reasonably priced is sweet not only for enhancing societal well-being and decreasing the pressure on public sources, but additionally for the viability of a crucial insurance coverage product.
The distinctive challenges of long-term care insurance coverage
LTCI insures folks for a really expensive circumstance that could be very more likely to happen.
About 70% of seniors would require long-term care in some unspecified time in the future of their lives,3 and Individuals spend greater than $471 billion yearly for long-term care.4 But Medicaid covers solely 42% of long-term prices. LTCI goals to deal with a good portion of long-term care prices by overlaying a variety of companies for individuals who want help with each day residing actions—for instance, bathing, dressing, and consuming—over an prolonged interval, typically offered at house.
Regardless of the prevalence and urgency of the necessity, nonetheless, LTCI has confirmed difficult for insurers. Rising healthcare prices and higher-than-expected claims have created unexpected monetary pressures. Persons are residing longer, rising the chance of needing to make use of LTCI, and fewer prospects than anticipated are letting their insurance policies lapse. For insurers, this leads to profitability challenges and uncertainty, whereas prospects face larger premiums, and thus diminished entry.
How AI can assist enhance LTCI profitability and progress
The success of insurance coverage corporations in addressing the rising want for LTCI will depend upon quite a lot of components, together with training, consciousness, and the effectivity and effectiveness of regulation. Above all, know-how holds the important thing for transformation in profitability and progress.
We’re seeing tangible leads to AI innovation with our insurance coverage prospects worldwide which have direct relevance for LTCI suppliers. These potential advantages are prompting many insurers to speed up their cloud migration and knowledge administration investments—a transition that’s key to the LTCI sector, which lags different insurance coverage segments. With the dimensions, safety, and resilience of the Microsoft Cloud mixed with the superior knowledge and analytics capabilities of Microsoft Material and the AI improvement alternatives enabled by Azure AI Studio, insurance coverage corporations can innovate quickly and confidently to fulfill their particular wants.
The way forward for insurance coverage within the period of AI
Listed here are among the vital advantages that insurers can apply to their LTCI choices.
Improve underwriting and claims administration
AI can streamline underwriting and claims processing in ways in which enhance each accuracy and effectivity. One vital space of focus is straight-through processing (STP)—the automation of a complete workflow, from the preliminary knowledge entry to the ultimate choice, with out the necessity for human intervention. STP helps to scale back delays, reduce errors, and unlock useful human sources.
Within the underwriting course of, AI helps allow STP for duties akin to analyzing historic knowledge, assessing threat components, and predicting the chance of claims, which helps underwriters make extra knowledgeable choices and reduces the time required for guide evaluations. It will possibly additionally deal with a bigger quantity of purposes with out a corresponding enhance in sources.
In claims processing, STP can automate the evaluation and triage of claims—for instance, by rapidly extracting and analyzing info from a variety of paperwork, together with medical data, coverage purposes, and claims varieties. Many insurers have lengthy used optical character recognition (OCR) know-how to digitize some of these paperwork. However the addition of generative AI supercharges how they are often understood, evaluated, and acted upon.
Automate contact middle experiences
With generative AI’s pure language processing and content material creation capabilities, insurers can optimize contact middle operations in ways in which assist each the client and the corporate.
AI-enabled copilots and digital assistants can deal with bigger volumes of routine inquiries, serving to brokers and customer support representatives present sooner, extra correct responses to policyholders’ questions on protection, claims standing, and extra. For instance, John Hancock applied a brand new AI resolution to supply assist for frequent buyer points and questions, which helps name middle representatives focus their efforts and experience on probably the most complicated instances, with higher buyer experiences and diminished wait occasions.
Automated techniques can perceive and reply to buyer inquiries in a conversational means, and even authenticate caller identities with voice biometrics, streamlining the identification course of and enhancing safety. For LTCI, AI can allow corresponding advantages by way of extra environment friendly operations, higher useful resource allocation, and enhanced buyer experiences.
Forestall fraud, waste, and abuse
Within the realm of fraud detection, superior analytics and AI-powered instruments can analyze huge quantities of information from healthcare vendor invoices to establish patterns and anomalies indicative of fraudulent actions in a well timed method. With higher insights, insurers can proactively detect and stop fraud, serving to make sure that professional claims are processed swiftly whereas minimizing monetary losses.
AI can even assist insurers establish uncommon patterns or anomalies that would point out fraudulent or wasteful actions, akin to flagging a selected facility if it persistently submits higher-than-average claims for sure therapies. Analyzing historic knowledge can even assist inform insurers to create extra strong, data-driven processes to find out which services to audit or to benchmark best-in-class operators.
Expedite regulatory, contracting, and auditing actions
LTCI is inundated with regulatory, contracting, and auditing actions, a lot of which depend on cumbersome guide processes. AI can enhance the effectivity of many of those workflows whereas additionally bettering accuracy, turn-around occasions, and regulatory compliance. Information validation, threat evaluation, and regulatory monitoring can all profit. Furthermore, AI’s predictive analytics can spot potential compliance points, and its enhanced reporting capabilities can help strategic decision-making.
Advancing LTCI with AI and Microsoft
We consider that with targeted, inventive innovation with AI, LTCI suppliers and their prospects can stay up for a shiny future by which extra folks can dwell with dignity and monetary safety of their senior years, because of high-quality, strong insurance coverage services. We’re excited to work with business and our world associate ecosystem to strengthen LTCI, in step with Microsoft’s accountable AI rules and our Safe Future Initiative.
To study extra about all our options, go to our Microsoft Cloud for Monetary Providers web site.
1AARP, “Lengthy-Time period Care Prices Might Double to $5.6 Trillion by 2047,” March 2018.
2KFF, “The Affordability of Lengthy-Time period Care and Assist Providers: Findings from a KFF Survey,” November 2023.
3Morningstar, “100 Should-Know Statistics About Lengthy-Time period Care: 2023 Version,” March 2023.
4A Place for Mother, “Lengthy-Time period Care Statistics,” September 2023.
As director of insurance coverage technique in Microsoft’s Worldwide Monetary Providers group, Jeffery Williams helps insurers deploy Microsoft’s portfolio of cloud and enterprise software options to construct next-generation capabilities. He has greater than 20 years of expertise working with C-suite executives to assist form digital methods that differentiate companies, elevate digital experiences, and increase margins.
