AI Premium Calculation in Insurance: What to Know for 2025

AI premium calculation refers to using artificial intelligence to figure out insurance costs quickly and accurately.

In insurance, premium calculation is the process that decides how much a customer pays for coverage. Traditionally, this involves analyzing various factors like age, health, or driving history. AI premium calculation uses computer programs that learn from lots of data to make this process faster and more precise.

This helps insurers offer fair prices while managing risk better.

Here's what premium calculation usually considers:

• Customer's personal information (age, location, etc.)

• Historical claims and behavior data

• External factors like market trends or weather

The AI premium calculation improves on this by automating data analysis and spotting patterns that humans might miss.

For instance, AI can handle real-time updates when new information comes in, helping insurers adjust premiums on the fly. It can also reduce errors from manual input. Advanced models might use machine learning algorithms to predict the likelihood of a claim more accurately than traditional methods.

For insurers, a big challenge is collecting accurate customer data during calls or online interactions. This is where solutions like Strada come in handy. Strada's AI-driven phone agents simplify premium calculation by automating the capture of customer data, updating information instantly during the call, and handling follow-up tasks after the call.

This means insurers save time and improve pricing accuracy without extra manual work.