How Automation Is About to Remake the Insurance Industry
Ushur is a Business Reporter client.
In search of a personalized experience, consumers are forcing insurers to adapt to their demands.
Thanks to technology, we’re all used to speed and personalization in our personal and professional lives. When a fast-food app can greet you by name and ask if you want your favorite meal again, you naturally expect that kind of customer experience from every company.
The insurance industry should offer the best possible customer service and the most personalized experience; after all, it deals with the most important parts of our lives, from health to safety to our families’ future. And it’s all possible through AI-based automation, from machine learning (making predictions based on data and learned experiences) to deep learning (using nonlinear algorithms to model abstract relationships in historical data). So, what are the top trends in automation in 2022, and how is insurance going to look different at the end of the year?
Incorporating individual preferences
Consumer personalization is the most obvious trend benefiting from automation, and it can drive the insurance industry. From shopping to entertainment, expectations for personalized experiences have changed. Customers want speed, customization and recognition of personal preferences—and insurers can actively meet their demand for individualism.
Insurers can’t afford to lag behind. Eighty-eight percent of consumers want more personalized insurance products and policies. And more than one-third of consumers say they’re interested in usage-based car insurance (using technology to track driving habits and adjust premiums accordingly); the volume of customer interactions using that technology has recently doubled.
Channel switching is another common expectation from customers looking for individualized service and flexibility. Insurers predict that the volume of inbound communication will increase substantially, and nearly two-thirds of consumers want to communicate using a variety of digital options—not by making a phone call. That means the insurance company must have a platform to offer a unified experience.
Experts estimate that there will be up to 1 trillion connected devices by 2025. These devices in our everyday lives continually learn more about us, our preferences and our surroundings. Of all the industries leveraging that data with data science to build powerful AI, insurance is one most ripe to benefit by connecting data to products, claims and customer service.
Optimizing operational efficiencies
The insurance industry is moving into a digital-first economy with successful firms quickly optimizing their operations and making them more efficient. While AI can’t (and shouldn’t) replace human connection and intuition, there’s no denying that AI’s ability to find, digest and analyze huge amounts of data far exceeds the capabilities of most teams of analysts. That capability translates to several big business benefits.
Better pricing. Working with large pools of data allows for very specific solutions that save time and reduce the margin of error for prices that don’t line up with costs. For example, a home insurance company could use AI to quickly analyze geographical location, marital status and other factors to come up with pricing very specific to an individual and their house. Using data—instead of intuition—as a guide allows for very specific offerings and lets insurance companies develop them more quickly than a purely manual effort.
Faster response time/higher response rate. Insurance companies are investing in AI-enabled systems to crunch and learn from claims data more quickly than human beings, and boost customer satisfaction. From a bottom-line perspective, this means companies will be processing more claims, faster and more accurately. This increases volume throughput without necessarily increasing staffing costs and reduces waste in the claims process.
Increase employee engagement/reduce turnover. No matter what type of automation is used, it reduces and in some cases eliminates rote work from employees’ daily responsibilities. If you look at a call center as an example, customer service agents won’t have to deal with the same query over and over again, especially when it’s a simple question. Automation takes the repetitive work out of business and replaces it with employee engagement.
Insurance agencies will use artificial intelligence to boost their bottom lines, market share and operational efficiencies in 2022.
Integrating with ease
Organizations are going to take sophisticated artificial intelligence and effectively integrate it into their automation flows in 2022—especially when organizations can apply AI intentionally and narrowly. With AI embedded into their capabilities, low-code/no-code platforms provide a win-win for the IT team, the organization and platform users (both customers and brokers/agents who adapt to the new tools).
While insurance carriers have lagged in automation behind other industries such as retail, one of the benefits of investing in AI-based solutions today is that the insurance sector continues to learn from early-adopter industries, reducing the time and cost of integration and adoption. Insurers will continue to seek and onboard SaaS solutions with enterprise-grade SDKs and powerful APIs to support modernization efforts, alongside their existing technological investments.
The benefits outweigh the costs
Change is hard. Adopting new technology that also changes how people work can be even harder. Customer service representatives may have to learn new roles. Brokers and agents may need to adopt different ways of interacting with customers. None of those changes are achieved overnight.
There are both tangible and intangible costs to adopting AI-driven tools and technologies. But the benefits of AI are so clear to both companies and consumers, and the pace of adopting AI will be so fast in 2022, that it’s critical to embrace this change for everyone’s benefit.
To find out more, visit ushur.com.
— William Roberts, Senior Product Marketing Manager and Meredith Barnes-Cook, Global Head of Insurance & Industries, Ushur
This article originally appeared in Business Reporter.
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Body Image 1 credit: Courtesy of Ushur
Body Image 2 credit: Courtesy of Ushur
