The insurance industry has been well known to be the least innovative when it comes to customer experience resulting in customers being disappointed and dissatisfied after their interactions
Nonetheless, things are definitely changing, and artificial intelligence in insurance is playing a key role in disrupting the entire industry and improving the insurance customer experience by leaps and bounds.
According to PwC’s 20th CEO survey conducted in 39 countries, the greatest concerns that loom over the 95 CEOs of the insurance sector today are the subdued premium rate, mild interest rates, shifting consumer behavior, slow economic growth, need for regulations and technological innovations and blazing market competition.
What boosts optimism, though, for these insurance companies amid much disruptive chaos is the fact that digital revolution is everywhere, increasingly transforming conventional business models and adopting digital solutions such as:
- Bot-based advice system
- Pay-as-you-go commerce
- GPS-sensing software
- Automated business processes
Let’s delve into the idea of introducing artificial intelligence in insurance, and how it impacts the current legacy processes.
Existing scenario for Insurance companies
According to the survey from global insurance leader EY that was conducted on more than 100 companies –
- 79% regretfully reveal that they are yet to think of going digital or are in their learning phase
- 57% said they own business operating models with no support for digital platform/solutions
- 89% don’t emphasize on previous interactions while serving customers with product/service recommendations
This shows how the insurance industry is struggling to comprehend and leverage digital advancements. The survey also illuminated some of the key challenges as faced by these insurance leaders. Some of them are:
Digital capabilities not meeting digital goals
On a stage of global digital leadership, companies aspiring to experience potential improvements in their digital objectives have failed to achieve desired results. Some of them admit to reaching somewhere near the target, however, those boasting digital transformations, are only 10%.
Much resistance from ambiguous insurers
Some of the negative elements that stymie the integration of all things digital are legacy processes, plain tech power, non-innovative approach, sluggish delivery and other internal constraints. Companies are still to overcome their ambiguity and hesitation towards digital intelligence to discover future business opportunities and unique potential for consistent growth.
Conflicts among distributors
Another factor that hinders digital implementation in the insurance sector is resistance from agent channels and distributors. This is why it is essential to eliminate inhibitions and clarify misgiving developed against investment in digital movement. Having an honest value proposition to improve customer experience can help alleviate the tension.
Poor mindset showed towards digital analytics
Customer segmentation, behavior analysis, and predictive modeling are modern drivers of marketing potential set in motion by smart data-driven technologies. Without installing capable analytics, it is impractical to draw maximum value from the implementation of the digital strategy.
Social media and mobile – still marginalized
At times when digital devices are indispensable, it is unreasonable to ignore the power of bringing insurance operations on mobile and staying connected to maximum prospects through the myriad of social media platforms. Since social media help make your marketing efforts more effective and engage with the digital-savvy audience, it should be an integral part of the digitization strategy.
Soaring pressure of cost, competition and consumer expectations
Although insurance CEOs are conscious of the herald of digital disruption breaking through the industry, it will be a whole new challenge to keep up with these revolutionary changes and to see it beyond the plain integration of modern technology. Intelligent solutions must be innovative enough to foster better customer relationship and deliver customer experience in a way that inspires much-needed poise between incipient market expectations and cost optimization.
Apart from these, another pressure point is coming from emerging InsurTech entrants who are giving rise to tough competition by creating affordable solutions to reach and serve customers. What is relaxing is that to surpass this challenge, industry leaders are prepared to embrace new innovative possibilities and appreciate the role of creativity in evolving the processes and becoming a beloved brand in the financial marketplace.
Application of Artificial Intelligence in Insurance
Over the last two years, we have seen the widespread advent and adoption of AI across multiple industries (be it hospitality or be it healthcare). The idea of digital technologies ruling financial market isn’t exactly new since Nasdaq in its early days established a secure connected network of trading desks for integrated customer data records. Many global financial companies and banks in those days relied on punch card and basic computing system to monitor customer activities. Hence, the concept of Artificial Intelligence in the Insurance industry analyzing data, anticipating results and helping with decision making is not so far fetched after all.
About the Author
Mitul Makadia is Founder of Maruti Techlabs and a true technophile. With his industry experience, he has rapidly developed Maruti Techlabs in specialized services like Chatbot Development, Artificial Intelligence, Natural Language Processing and Machine Learning. Makadia has considerable expertise in Chatbot Development and NLP.