AI will be the real game-changer in insurance

Emerging technologies like IoT, RPA, bots, AR/VR will disrupt the insurance space; but it is artificial intelligence that will revolutionize the entire gamut of operations in the sector.

Ekhlaque Bari Feb 27th 2018

Internet of things (IOT), Robotic Process Automation (RPA), bots, and augmented and virtual reality (AR/VR) are the new kids on the block that are changing the insurance space. But artificial intelligence (AI) will be the biggest change agent not only in insurance sector but in almost every other industry.

Artificial is real

The reason behind AI’s universal appeal is that on one hand it can be deployed in a multitude of scenarios.  On the other hand it would be used to bring the best out of other emerging technologies like IoT, RPA, bots and AR/VR.

One predominant use case is the start of digital twins. Soon, for every job role in insurance there will be an equivalent digital twin— it could be a digital underwriter, a digital advisor or a digital customer service agent.

Initially, they will assist humans and will only perform menial tasks such as simple underwriting of cases or part of a case, which is based on a simple analytical rule. However, over a period of time, this digital twin will take on more complex tasks, thereby enabling the human underwriter to handle more complex and value-adding activities.

“Initially, a digital twin will only perform menial tasks such as simple underwriting of cases or part of a case - based on an analytical rule. Over a period of time, this digital twin will take on more complex tasks, thereby enabling the human underwriter to handle more complex and value-adding activities.”

The other areas where AI will have an impact is advanced analytics. It can be used to run intelligence campaigns for acquired customers, convert a lead into sales, and cross-sell and up-sell opportunities. Sophisticated, complex algorithms will be used to target the right markets, reach out to the right customers and convert them.

AI will re-invent the wheel and the cycle

Artificial intelligence will be extremely useful in customer profiling. It’ll make the drawn-out process of gathering customer data from public domains such as Aadhaar and social media to create their profiles much easier.

This data can be used to personalize customer experience based on behavior analysis. And once the customer is on board, the insights can be used to cross-sell or up-sell.

AI algorithms are also being used for sentiment analysis. For example, voice analysis can determine whether the customer is happy or unsatisfied. One aspect of servicing the customer or the best thing to do to service the customer is to anticipate the needs and suggest solutions even before the customer asks for it.

The second aspect is, when a customer is asking for a service how quickly can you get it processed. And the third aspect is being able to strengthen the relationship with the customer by estimating which products he will be more likely to buy, and making it happen.

From non-living to living

Your car doesn’t talk to you, neither does your refrigerator or your air conditioner. With IoT, not only will these talk you, but they will also talk amongst themselves!

With the abundance of healthcare and wearables data, IoT will allow insurers to establish dynamic and segmented pricing models. For example, today if you buy healthcare the premium pretty much remains the same. It may vary by age, but tomorrow it could vary depending on which tier city you live in.

With real-time data coming in from IoT sensors and devices, premium will depend on customer behavior and choices. So IoT will be a big game changer in servicing and claims.

Reality delayed is Reality denied

Why wait for the real estate to be ready when you can experience its reality? Yes, using AR/VR it is possible to digitally experience things that do not exist, or are hidden.

Bari-Photo-quote

The next decade belongs to AI, IoT, RPA, AR/VR and Bots. AI specifically will be the ‘power’ behind these new ‘powers’. It is optional today; but within a couple of years it will become a necessity for surviving in the market.

Ekhlaque Bari
 EVP & Head-IT,
Max Life Insurance

AR/VR will impact areas such as property insurance. Using AR and VR one would be able to figure out whether a particular property is built according to the insurance standards or not. For instance, it can be used to determine whether the plumbing and the fire prevention system behind the walls and ceilings have been built as per safety standards.

Other use cases include remote underwriting. The underwriter is sent details of the asset over network, which is then used to build a digital replica of the actual asset. It will help save costs and increase the accuracy of underwriting.

Humans are robots, no?

And yet most of us indulge in various robotic tasks every day. Sometimes it involves repeatedly cutting and pasting data from one system to another or repeatedly running the same macro on fresh sets of data.


RPA will help automate the ‘robotic’ tasks which are repeatable, done on a computer and use structured data. RPA will result in a tactical transformation only as the need for RPA usually indicated system inefficiency. Until the time systems are integrated, RPA is going to help bring in efficiency by replacing manual tasks with software robots.

Ahh, finally a computer that understands me

Bots are nothing but software that understands conversational language. Most computer interfaces are menu driven and users usually navigate through the menus and submenus to complete a task.

For example, a typical navigation to renew insurance premium would follow the path of website->click existing customer->click login->click renewal->select renew policy->make payment->

In a BOT, the same thing would be achieved in a manner somewhat like below:

BOT: How can I help?
Customer: Need to renew policy
BOT: May I have your customer ID?
Customer: XXXX
BOT: You can renew your policy # 850-6-568-0 by making a payment by clicking on the link below

 

You get the drift?

When it comes to bots, the real value goes back to the usage of AI, as bots are powered by tech such as AI and NLP (Natural Language Processing). Bots provide a conversational interface but they are not going to completely replace the menu and navigation systems because there will always be a consumer who is more inclined towards the system.

Millennials might prefer a conversation or a voice interact, whereas some others might use menu and navigate. People will take time to trust bots.

Leader or Laggard?

SMAC (Social, Mobile, Analytics and Cloud) has powered digital transformation for the past decade. The next decade belongs to AI, IoT, RPA, AR/VR and Bots. AI specifically will be the ‘power’ behind these new ‘powers’.

Enterprises who aim to reach the next orbit of performance on business growth, healthy margins and customer experience will need to implement these emerging technologies in healthy doses. It is optional today; but within a couple of years it will become a necessity for surviving in the market. Start today and stay ahead!

The author is ‎EVP and Head of IT at ‎Max Life Insurance.

Disclaimer: This article is published as part of the IDG Contributor Network. The views expressed in this article are solely those of the contributing authors and not of IDG Media and its editor(s).