Chapter 7: Augmented Reality in Risk Assessment and Claim Processing: Transforming Decision-making in Insurance

This chapter evaluated the feasibility of augmented reality (AR) within the existing insurance landscape and assessed its implications for risk assessments, claims processing, and customer engagement. This chapter begins with an overview of AR techniques, as it consists of digital images superimposed within a real-life-based environment – this essentially allows assessors to view hazards or damage to property more effectively as they can see real objects in three-dimensional (3D) with additional sensorial features. For risk assessment, AR can form holograms or images of potential hazards, allowing assessors to gauge the proper premium rate and how adjustments might be made in the face of risk. Claims processing is a quicker endeavor with AR-facilitated technology, as policyholders can use AR-driven applications to file claims instead of relying on hard copy filings. AR applications decrease human error – decreasing human interaction during the compile process. AR decreases the number of fraudulent claims as well, fostering a better understanding of the insured and added application ease through direct engagement in the application interfaces. Naturally, such developments pose privacy and ethical issues as well. The successful implementation of AR necessitates not only that companies overcome technological hurdles but also that a comprehensive and clearly defined legal and regulatory framework be established. In addition, there are paths for prospective research to be conducted to ascertain how AR will blend with artificial intelligence (AI) and other internet of things (IoT) devices for increasingly complicated predictive efforts. The more companies digitize – especially on such a vast scale with AR – the more insurance companies can provide malleable applications to meet consumer needs.