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The technology shaping the future of insurance

By Jacob Hutchinson, Appian UK Insurance Lead

The words insurance and innovation have not always been uttered in unison, but this is now changing. Many Financial Services and Insurance (FS&I) companies have started to adopt and integrate emerging technologies into their corporate ecosystems and their day-to-day activities, as they attempt to attract and retain customers in a highly competitive market.

However, it is not just technology for the sake of technology. The forces driving innovation are practical and even essential to improve customer experience and employees productivity. So which emerging technologies are driving this innovation, and how are insurers looking to digitally transform to keep pace with the competition?

 Digital claims: driving industry differentiation and transforming customer experience

The point of claim, not the point of sale, is often where insurers can use technological solutions to differentiate themselves, build customer trust and boost renewals most effectively. Insurance is a distress purchase for most consumers. It’s just something they need to have. An excellent claims service must be responsive, flexible and require minimal effort from the claimant, from first quotes to settlement. Picture this: your TV breaks, you take a photo on your smartphone, upload it to the claims app; the app recognises the model and issue using image recognition and processes your claim automatically. This is the reality of what is possible today. Adoption by insurers and expectation from customers are quickly gaining pace.

 Insurers need to work harder and smarter to leverage innovative, even disruptive technologies, or get left behind. Customers are less loyal, prone to shopping around, are driven by price and expect a customer experience akin to online retailers like Amazon. If a customer has a positive claims experience, they are likely to return and remain a customer. It is far better for insurers to invest in the claims customer experience than the initial sales enticement.

Those that can automate, optimise and accelerate the claims management process will quickly outperform the competition, winning the hearts and wallets of customers. And it is only going to get more complex and more competitive. As individuals move further and further into a digitally connected lifestyle with driverless cars and smart homes, the nature of claims will change with the involvement of manufacturers, as well as increased security and data protection concerns. Now is the time for insurers to focus, more than ever, on their customers or risk seeing them go elsewhere.

 Meet chatbot, your latest insurance advisor One thing that insurers always have in abundance is data. What is different now? The capabilities of super computers to process data and uncover insights in real-time are unprecedented. As a result, the insurance industry is perfectly poised to be transformed by the increasing adoption of Artificial Intelligence (AI) and machine learning.

74% of consumers say they’d be happy to get computer-generated insurance advice according to Accenture’s 2017 Global Distribution & Marketing Consumer Study. As people begin to interact with chatbots with AI, they can come to expect more personal, tailored responses and services. Based on an in-depth customer profile pulled for every part of a business in real-time, AI makes it possible to make recommendations for current and future needs. It may be a house insurance quote now, but your profile flags that your car Ministry of Transport (MOT) testis due and suggests a renewed policy for that as well. These bespoke suggestions are both helpful to customers and lucrative for insurers as cross-sell or upsell opportunities.

According to insurance industry analysis firm Strategy Meets Action, improving customer experience is the number one strategic initiative in insurance, with 97% of L&A insurers and 94% of P&C insurers recognising it as a priority (SMA Research, 2017 IT Spending and Priorities). By bringing disparate data from siloed systems together seamlessly on one unified platform, insurers are able to view an accurate, complete, and up-to-date record of the customer at any given moment. Aviva’s customers are already experiencing this as the organisation unified 22 different systems into a single unified platform for its call center operations. Their customer service agents now have a 360 degree view of customers and can quickly act on inquiries. As a result, Aviva has seen a 40% decrease in operational service costs in just six months and nine times faster customer service times.

As the insurance workforce receives a boost with a new wave of chatbots, they can process thousands more claims, respond to customer enquiries faster and access data for an increasingly superior customer experience. AI and machine learning are opening doors for a new customer-centric insurance industry.