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HOW INSURANCE BENEFITS FROM THE IMPLEMENTATION OF AI AND BIG DATA

30/01/2019

Sofie Quidenus-Wahlforss is the CEO and founder of omni:us, an AI provider helping the insurance industry embrace digitisation. 

 

The insurance industry has undergone more transformation in the last year than any other year, due to the innovative and increasing incorporation of artificial intelligence and big data practices. As a new year begins, there can be no question that traditional industries must embrace digitisation in order to maintain the same trust, loyalty and retention with customers, paving the way for new and emerging technology to take the floor. For the insurance industry especially, one still toeing the line between tradition and innovation, the advancement of this emerging technology can be felt across a variety of company practices.

 

With the rise of cutting-edge technology used across various industries, customers are now demanding the same level of service – convenience, timely responses and quick resolution, to start – from each provider they work with, forcing late adopters to innovate with AI and big data in order to keep up.

 

AI is now generally viewed as a necessary next step to insurers, as is the data that’s collected by the inclusion of automated practices. Big data is aptly named – it’s big, and growing. The International Data Corporation suggested that by 2025, the global data sphere will produce a total 163 zettabytes per annum (1 zettabyte = 1 trillion gigabytes) –  a tenfold increase in data generation, with unstructured data growing 15 times faster than structured, promising a wealth of information if companies have the proper systems in place to understand it.

 

However, many insurers are still in the dark as to how exactly the incorporation of artificial intelligence and implementation of data-led practices can aid business, and what their company stands to gain from such innovation. Today, companies must not only implement AI or collect data, but effectively apply its insight to valuable practices, thereby optimising the company’s efficiency, product offering and customer interactions. However, the inclusion of AI and big data can transform business practices and enhance customer service for insurers in a myriad of ways:

 

 

Improve productivity and efficiency

Insurance companies must process large amounts of highly variable documents each day, always striving to balance speed with accuracy and minimise human error. This is a prime opportunity for artificial intelligence to automate such tedious, manual tasks of claims management by reading, understanding and extracting relevant information – completing in minutes what may have previously taken hours or even days or even weeks to do. Additionally, the more the system “reads”, the more it learns, so it’s ever-improving.

 

 

Switch the focus to data and customers

As well as improving time and accuracy, AI unlocks the wealth of data available in various claims documents that will contain valuable information for long-term innovation. At omni:us. we predict that the insurance industry will move from process driven to data driven over the next few years, primarily because data holds the key to improved customer understanding. By using AI to analyse customer data, insurers will be able to develop better practices, improve services and understand customers better for a two-way benefit.

 

 

Embrace the digital customer

Insurers must master the art of attraction and retention by relying on the incorporation of advanced technologies like artificial intelligence, especially when working with the newest generation of insurance customers: Generation Y.  With less than half of the generation’s insurance customers loyal to their current provider (and only 29.5% currently satisfied with them), habits towards technology could unlock retention among young customers. By further digitalising each aspect of a customer’s experience from web services to policy comparison, sales, interaction and, of course, claims, insurance companies can satisfy the expectations of all customers, and retain regardless of generation.

 

 

Tailor to the consumer

Once the customer interaction chain is digitised, it’s highly important to provide according to their standard. In the digital age, people are looking for personalised options in every field. In addition to given claims documents, new resources like GPS-based apps enable new opportunities for offering bespoke coverage (such as pay-per-mile insurance) and the hyper-personalised options that consumers have come to expect.

 

 

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Finance Derivative is a global financial and business analysis magazine, published by FM.Publishing. It is a yearly print and online magazine providing broad coverage and analysis of the financial industry, international business and the global economy.