Opinion: AI Will Change Insurance Forever – Is Your Company Ready?

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This latest Opinion piece is by Glenn Le Santo, who is Insurance Edge’s roving Data and Tech Editor-at-Large. He works for Orange Business Services, helped found Linc-Up Live and has two decades worth of online experience. Interesting reading is always guaranteed.

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As December approaches, magazines are full of features trying to predict the future, which is always a tough gig. So what key trends can we see in Insurance for the 2020s as an exciting decade? Well, the idea of a vehicle filing its own insurance claim might seem like something from a Sci-Fi movie to you today, but fully autonomous interaction will probably become commonplace across all lines of insurance by 2030.

An article on Mckinsey.com, looking at Insurance 2030, notes that the industry is on the verge of a seismic shift fuelled by technology. According to the the article “Artificial intelligence can deliver on industry expectations through machine learning and deep learning.”

I’d argue that some parts of the industry still cannot imagine what AI might deliver in the future, it’s still the stuff of dreams to many people concerned with traditional emails, ExCel spreadsheets and conventional admin. But it’s clear that AI will bring profound change to claims, distribution, underwriting and pricing.

Data will become increasingly valuable, and the ability to receive, collect, transmit, store and analyse and utilise data to improve business decisions will give an organisation significant market advantage, over those competitors who bring a weaker data game to the table.

McKinsey points out the challenges businesses face when dealing with an “explosion of data from connected devices”. Cars, home assistants, fitness devices, smartphones and watches, and security devices will all fire vast amounts of raw data at an organisation, presenting significant issues regarding storage and security even before the process of analysis and utilisation of the data begins. Legacy technology and mindsets will hamper efforts to keep pace with these advances in data flows. Agile virtual networks and cloud-based storage will be essential to deal with ebbs and flows in bandwidth and storage.

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This data will be of such high value it will eventually feature on balance sheets as a tangible asset. A company’s ability to run efficient and productive data journeys will define their competitive edge.

For example, insurance fraud is already being tackled by AI-based solutions that crawl the internet and social media accounts looking for evidence of fraud in insurance claims. Such data collection and crunching will be become increasingly sophisticated, and the number of data touchpoints will increase exponentially. However, fraudsters will apply AI to their own efforts, there will be a constant arms-race between the legitimate and the illegitimate. Some things never change.

AI and data will transform the customer relationship, as well as the way an organisation engages with their customer. Data will give a clear and highly detailed picture of a customer, their likes and dislikes, how they want to be contacted and when. Detailed customer data should allow a high degree of intimacy with the customer and AI will even fuel prediction of what the customer will want or do next.

Stephane More-Chevalier states in an article published on orange-business.com about how AI will affect customer contact centres in the future, and that “It is no longer enough for your contact centre to be a reactive customer service operation. Today’s consumers expect a proactive approach and for suppliers to know who they are, what they want and how they want it.”

Stephane notes that “customer experience will overtake price and product as the key brand differentiator”. Data and AI will be vital to providing this customer experience and keeping pace with the levels of service offered by technology-driven competition, especially from new players that have been built ground up to exploit these rapid developments in technology.

Contact centres, like connected devices, will also produce increasing amounts of data via multiple contact channels and proper organisation and analyses of that data will lead to a better understanding of customers’ wants and needs, including a predictive understanding. Data may enable your company to know what products and services your customer wants, before they know they want it.

About InsuranceEdgeEditor (2383 Articles)
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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