AI Driving The Future Of Customer Experience In The Insurance Sector

 

AI Driving The Future Of Customer Experience In The Insurance Sector

The Insurance Industry is undergoing a perfect revolution. Developing regulations, changing customer demands, advance in technology, increases in data, impact of natural disasters, shifting demographics are all combined factors that are shaking the industry to its roots. But there is one sole factor behind this interchange, which is Artificial Intelligence (AI).

The AI technology is creating a bunch of alternative possibilities. Big Data creates new opportunities to insurers to make use of unprecedented insight into their end-customer’s life, property, health, wealth and behavioural pattern. Advances in Artificial Intelligence are allowing insurers to shift through this data quickly and efficiently, enabling more personalized approaches to risk management, reduced liabilities and premiums in return. The ability to access data faster than ever before also allows insurers to settle claims more quickly. Those claims otherwise would have taken weeks and months to settle down.

This change-over has given rise to new players, alternative ways of working and competitive business models. In the times of rapid change, it's hard for executives to separate facts from fiction, easy to be seduced by the latest trends and tempting to be drowned into blindly copying into what the competition is doing. But following the crowd is not the answer.

The most successful companies across industries understand they have to build a strong and distinctive identity that allows them to cement their own market position rather than reacting to the market that is created by others. Creating such a strong identity means that you must be very clear the way you’ll add value to your customers in the future.

Insurance Companies have been investing a lot in Artificial Intelligence and trying to build a new industry that is based on substrate of technology and data. That means one can use AI to pay claims in a literally few seconds.

Insurance is an economic necessity, but we do not trust it even after centuries of its introduction. The industry has been trying to build a business module that aligns with the customers. This is an enormous challenge for the Insurance companies worldwide. Everyone it worrying about Digital Transformation, which will come definitely. But the reality still is that the traditional offline insurance claims and underwriting are carried out. They’re planning to go from offline conversation to conducting digital meetings. Now that the customers have a totally different expectation from the Digital world and the current COVID-19 situation has pushed it further north. Interacting with the customers via digital means and traditional channel has become a new norm, and it is going to uptake.

Insurance is a very involve product, it’s not like buying a vehicle, electronic devices or accessories, but it’s a product you’ll be buying for life. A term-life insurance you’ll buy it once, but yet you don’t know whether you will get your money back. While buying such a product/service, one might require a lot of assistant and now that people are on human relation rather an AI system. But now is the time as people are moving for no contacts, encouraged social distancing, the Internet speeds have gone multi-fold, the communication through phone has become cheap and people have reached out via digital channels, all these factors are contributing to the use of AI and ML systems.

Customers are increasing AI-only interactions such as while researching, browsing and making an online purchase, this makes clear that customers are ready to interact with an AI system. Customer expectations have evolved to a point where they are almost willing the interactions with the systems rather than talking to an executive. This clearly states that people have grown their trust in AIs. Apart from Insurance Industry, many manufacturing industries are deploying AI machineries for more qualitive, precise and productive manufacture of products.

The life insurance policy has dropped significantly in US since 1960s from 72% at the time and 42% at present. This has led to introduction to a new application known as ‘Automated Underwriting’ in the Silicon Valley. Through automated underwriting, computer software makes a decision to issue a life insurance policy using data and algorithms without any human involvement. It uses the data available of people to make decide on whether or not they are insurable and the level of insurability they possess. Based on the information the companies get from different sources including motor-vehicles, pharmaceutical information that all put together a score and allows them to a decision on whether or not the person should be issued a policy right there and then.

With a large portion of population opting for digital means or an AI Systems, there’s a lot of data available on Internet for the insurers to find out their new policy holders.

That’s all for this time. Share your thoughts in the comment box.