For an industry usually perceived as slow in adopting digital technologies, the insurance industry has attempted to keep abreast of technology driven fast-paced innovations in the recent years. Technology is a dramatically evolving industry, and digital advancement in the field of insurance is accelerating. New technologies in insurance have enhanced customer interaction experience and insurer’s operational efficiencies.
The first significant stride of the insurance industry was digitization, which is now being followed by the ‘InsurTech’ wave. This wave is redefining how insurance companies operate, and propelling them towards a customer-centric strategy.
AI is a widely used digital tool in the industry today. Over the past few years, AI technologies have matured significantly leading to increased adoption. Many insurers are confident that they have in-house capabilities to take up AI implementation. However, the more companies work with AI, the deployment challenges keep increasing.
A recent Gartner research shows only 53% of projects make it from artificial intelligence (AI) prototypes to production. CIOs and IT leaders find it hard to scale AI projects because they lack the tools to create and manage a production-grade AI pipeline. The road to AI production means turning to AI engineering, a discipline focused on the governance and life cycle management of a wide range of operationalized AI and decision models, such as machine learning or knowledge graphs.
To move out of this predicament, insurers increasingly turn to the experts - InsurTechs. InsurTechs are technology-led companies providing operating platforms which take digital insurance to the next level. Their combined insurance domain and technical knowledge equips them to extend innovative offerings across the insurance sector. InsurTechs use digital channels, expert strategizing, and deploy autonomous AI adoption.
InsureTechs could help insurers:
- Develop a customer a first-business approach based on enabling technologies
- Automate and manage core processes like claims, risk assessments, and pricing
- Find new avenues of growth
InsurTech value drivers:
Using digital technologies, web and mobile app based delivery platforms, machine learning and AI, there are several aspects of the insurance value chain that can be impacted.
- Operational efficiency
Legacy systems and processes have held back the insurance industry far too long. InsurTechs are focusing on implementing smart processes that provide efficiency, quicker response time and low operational costs, all of which directly impact the customer experience. Platforms have already been introduced, where tasks such as policy or writing claims can be done effectively and in no time.
- Personalized offerings
These days, AI and digital transformation are placing customers in the drivers' seat. Options are available for assessing volumes of multi-dimensional data sets, and gain insights about the customers which otherwise would have been either impossible, or costly and time-consuming manually. InsurTech is helping provide customers with excellent services without efficient resource utilization.
Industry experts, therefore, work hard in harnessing AI's power towards creating a personalized experience for customers in paying their bills, file claims, viewing their policies, and many other things in just one go.
Adopting the right AI technology in insurance makes it very convenient to give instant feedback and help brokers do their jobs more efficiently. Autonomous AI adoption can genuinely impact the target audience through the reach of social media. This enables the insurance sector to reach out to new customers and focus at scale on the target audience.
- Flexibility in processes
With the personalized demands of the customers, keeping flexibility a "constant" also becomes essential. Insurers are resorting to high levels of automation to reduce the time and rate of core processes. Insurtech products can easily automate low-value tasks, freeing the employees to focus on more important tasks. For example, chatbots collect necessary data directly from the customers and provide self-service from the dashboards and apps. This data can directly be fed into the CRM, which can be used for underwriting or claims. What's more, is that the system becomes flexible in terms of the data being fed - AI can infer patterns from structured, semi-structured and unstructured data and also in various forms - textual data, images or videos. Operations become more scalable, efficient and companies can maintain working relationships with customers at lower costs.
- Cost efficiency
Building an internal skill set, along with the right infrastructure for AI adoption is a tedious and time-consuming process. InsurTechs on the other hand, already have in-house capabilities along with industry knowledge to hit the ground running. The alternative solutions being offered by them compared to current systems are usually both time and cost saving.
- Fraud prevention
Having a seamless and fraud-proof claims process is the ultimate goal of every insurance company. Rule-based systems are error prone; they either mark normal claims as ‘suspicious’ or lead to fraud slippage. This adds to the costs, and already time-consuming manual checks. InsurTechs, however, comb through millions of data sets and correlations to tackle fraudulent claims, and march towards a more transparent claims process. These solutions help insurers adopt a proactive approach rather than a reactive approach.
Companies need not jump into kick-starting a project with a vendor immediately - they can identify a pilot project, evaluate the outcomes, analyze cost, the goals fitment and then identify the right area to implement.
Cutting edge technologies and out-of-the-box innovative approaches have the power to help Insurance companies keep up with competition and serve the digital customer better. Depending on the company’s priorities, selecting the right fit InsureTech partner becomes crucial. The right partnership allows insurers to actually focus on their core objectives; while letting the InsurTechs do the ‘heavy lifting’ on new technology.