In today’s fast-paced world we’re continually faced with speed bumps that slow us down and let’s face it – insurance is one of them. Still, the days of phoning around and repeating your details are long gone. From comparison sites to timely reminders from the companies themselves – getting an insurance quote is becoming cheaper and easier. And it’s mainly down to the adoption of artificial intelligence.
From black boxes to chatbots, the insurance industry is jumping feet first into data – and your wallet is thanking you.
Profound impact
CEO and co-founder of AMPLYFI, Chris Ganje, believes that using AI gives insurers the speed to keep up with modern day life. He said:
AI is having a profound impact on the insurance industry across the board from strategy and policy pricing to marketing and administration. AI is able to digest and analyze vast datasets at unprecedented speeds and accuracy. For insurers, this is enabling benefits on a number of fronts, such as speeding up quotes and pricing policies, enacting faster claims settlements, better fraud detection, and better customer profiling, for example, identify safer drivers through telematics data.”
Driven by millennials
Like with many financial services, consumers are shifting towards digital-first products. But for Richard Hartley, CEO & Co-Founder of Cytora, for him it’s millennials that are truly in the driving seat.
Millennial consumer behavior is forcing irreversible changes across financial services leading to the emergence of digital-first and app-based services for banking, loans, mortgages, and investment. As the millennial cohort start their own companies and move into decision making roles in business, commercial insurance is beginning to undergo the same revolution.”
This all adds up to a more personalized quote market believes Ben Little, the founder and Director of Fearlessly Frank. He thinks that AI is enabling insurers to offer more customized products to appeal to a broader spectrum of clients. This “Insure-tech” uses digitalization and even AI to create new products.
Two of the first startups to launch in this space were the Lemonade and Cuvva apps which targeted the home and car insurance markets. More recently came Sherpa, a new AI-driven insure-tech platform, with the aim of breaking down the categories and providing a more holistic offering. By using a bespoke algorithm to build a personalized data profile, Sherpa gives each user a “score,” telling them their risk and cover needs across all insurance types.
Paul Firkins, Hood Group’s Business Development Director, agrees. He said:
With ever-growing sources of data; from the Internet of Things (IoT), Telematics and Mobile phones to name a few, only AI can harness and exploit this vast knowledge. It will turn the customer experience from a generic ‘one size fits all’ proposition to a journey where products are personalized, pricing feeds into a behavioral and perhaps lifestyle layer and claims are instantly settled; all linked together with seamless automation. This makes AI a tantalizing and increasingly competitive area for insurers to focus on.”
Making data even more useful
But where is the industry collecting its data from? Ganje confirms a multitude of places:
Predictive analytics in the insurance sector is one area that AI is beginning to transform. Accurate forecasting is a key output of business intelligence, with companies only now waking up to the potential of insights that can be generated from applying advanced analytical techniques, such as machine learning, to the vast quantum of data increasingly becoming available.
For example, at AMPLYFI we use cutting-edge AI to find, harvest, and analyse data from both the surface and deep web held across millions of academic papers, patents, government reports, databases, journals, or news items, to find signals and generate trends that can help businesses make important decisions about the future. Using historical data is the basis that insurers use to understand their customer base, helping them to forecast their exposure to claims. Improving the breadth and depth of the variables that drive this process allows companies to adjust the pricing of their products and premiums, enabling them to attract more customers while maintaining financial performance.”
It’s something the bigger firms are introducing as well. Omni:us is a company that has developed cutting-edge technology for many of the top global insurance companies – such as Allianz, Baloise and AmTrust – which count on its deep digital transformation expertise in order to innovate and meet growing customer needs. At the same time, insurtech firms – such as Wefox – use omni:us to boost efficiency and focus on core competencies. They said:
At omni:us, our prediction is that the insurance industry will move from process to data-driven over the coming years. With regards to both current and future markets, this approach is the fundamental means for insurance companies, whatever their size, to stay competitive, and effective implementation of AI technology will make this transition possible.”
Customers are noticing
For Dimitris Vlitas, Principal within the Artificial Intelligence team at Data Practitioners, he thinks the improvements are certainly noticeable:
Customers will witness frequent, noticeable improvements in the way that companies engage with them, especially through digital channels. These new methods will ultimately replace traditional marketing techniques. AI and data will take center stage, delivering customers relevant and intuitive promotions that align with their ever-changing circumstances. Applying AI to data that is fully anonymized will create high-quality insights and more successful promotional activity. The most successful businesses in financial services will do this, and in so doing, build a competitive and commercial advantage.”
AI to enter the mainstream in 2019
Most of the experts I spoke to agree that while 2018 was a pivotal year regarding the solutions AI could offer companies, this year will be when these innovations trickle down to consumer-level.
Vlitas added:
AI, combined with behavioral science, will without question be an incredible driver of economic value in the financial services sector. In 2019, we’ll see evidence of its successful application, as agile businesses utilize the latest methodologies to tailor their offering to the individual needs of the customer.”
Richard Hayes, CEO, and Co-founder of Mojo Mortgages agrees:
AI went from a buzzword in 2018 to reality in 2019. As with any new wave of technology, genuine adoption is when new tech can be judged. With so many examples of successful implementations of AI over the past year, the adoption of this technology should and must be part of any CEO’s strategic plans for long term reduction in costs, removing barriers to scale and enhancements to their existing business models.”
Indeed, some might say that the insurance industry could be the instigator of mainstream artificial intelligence. Where previously, fears of threats to jobs have instead been replaced by personal habits and data that not only speed up the annual insurance faff – but also save money.
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