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WHY AI IS MORE IMPORTANT THAN EVER FOR INSURANCE COMPANIES

By Faisal Abbasi, Managing Director UK&I, IPsoft

 

Much has been written about the potential of Artificial Intelligence (AI) to revolutionise insurance. The sector has made huge strides to drive innovation by investing in new technologies over the last few decades. Indeed, the financial services industry has long been ahead of the curve in terms of elevating the user experience for both customers and employees, and many have already invested in building a Hybrid Workforce, in which human and digital colleagues work together.

Today, amidst unprecedented sudden challenges that have upended industries, businesses and lives with a strong impact on insurance services, it doesn’t really come as a surprise that many are already looking to AI-powered digital employees and investing in cognitive solutions to upgrade and scale customer-facing processes. So, where can AI be implemented to transform processes and improve operational efficiency and customer service within insurance firms?

 

Empowering customers

Digital employees, like Amelia, can automate common user engagements, such as claim enquiries and quote to cash functionality at scale through Natural Language Processing (NLP) whilst securing backend integrations with an organisation’s specific CRM and data management systems. For example, a customer can get immediate answers to questions like, “When is my monthly premium due?” or “How much would it be to add my daughter onto my auto insurance policy?” and leave expert human agents to handle individualised customer needs. This benefits both employees and customers by firstly speeding up the customer resolution process and secondly giving back time for agents to focus on higher level requests.

By automating straight forward enquiries, insurers can improve customer satisfaction rates by empowering them to get answers more quickly and efficiently. In turn, employees can instead focus their time on higher-level interactions that are both more rewarding for the employee and beneficial for the business, such as building rapport or handling sensitive enquiries.

 

Streamlining the customer journey

Insurance firms want to make the customer experience of their contact centres as seamless as possible. So, many have chosen to integrate AI at the beginning of the customer journey to help authenticate users and identify the intent of enquiries. For example, a digital employee can confirm the routine information, such as asking “What is your name and policy number?” or “In a few words, describe what we can help you with today.” and get the customer in front of the right agent from the outset. This again allows human agents to avoid repetitive information-gathering tasks, saving them huge amounts of time and helping better manage incoming calls.

 

Augmenting agents’ experience

As well as automating simple tasks, digital employees can also support in augmenting the work of human agents by acting as a ‘whisper agent’. Digital employees can work directly with customer agents by discreetly sharing instant, relevant information with them – hence the term, ‘whisper agent’. This is key for ensuring all customer calls are compliant with the industry’s significant regulatory requirements as well as being in line with company protocols. Having the relevant information at hand in turn makes the call more seamless for customers and means employees do not have to spend time searching through databases, policy guidance or FAQ documents before responding to customers.

In this capacity, digital employees can significantly enhance employee satisfaction. By providing staff with instantaneous, on-demand information, human agents can feel safe in the knowledge that they are not only working quickly and efficiently but that their customer engagements are compliant. In addition, whisper agents reduce the time it takes to upskill new employees on company and customer processes, meaning organisations can get new recruits into client service roles quicker.

 

The future of insurance is in the Hybrid Workforce

According to Deloitte estimates, more than 85% of customer interactions are predicted to be managed without a human by the end of this year. A similar McKinsey report suggests that AI will transform every aspect of the insurance industry over the next decade. The role of insurance agents is changing dramatically, and with it, so are customer expectations. We will see an increasing number of firms adopting a Hybrid Workforce, in a bid to speed up processes and enhance the customer experience.

It will no longer be feasible for organisations to expect customers to wait in long phone queues to get the answer to a simple claim query. AI is causing significant changes and improvements to customer service across nearly all industries, and insurance is no exception. As more and more organisations get onboard with the notion of a Hybrid Workforce, there will be widening divide between the AI-haves and the AI-have-nots.

But it is not just about being ahead of the competition – it is also about being able to scale quickly and flexibly in order to cope with our fluctuating circumstances. Today, more than ever, it is vital that insurers can manage spikes in customer enquiries.

 

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TIPS FOR BUSINESS EXPANSION

Alan Sutherland, CEO of Kind Consumer

 

Every successful business had a beginning.  Its founders usually looked for ways to gradually expand, attract new customers and increase monthly revenue.  From the outside looking in that type of success often feels as though it requires some form of magic or hidden formula.

So how do you drive success?  There are two which are fundamental to success.  On first glance they may seem obvious, but they are often neglected.

 

Do you have a strong team?

No matter how great your business or idea you will not drive it to its full potential without a strong team behind you.

The process of recruiting and finding the best talent is never easy.  You must over-invest time in the process as it is a fundamental investment and future growth driver.  Two principles I have learned over the years when looking at recruitment are, to surround yourself with people who are better than you and do not be afraid to recruit someone who could make you redundant.

If you can achieve these, the benefits are clear.  Better business results, stronger talent pool, and with capability future fit plus built-in succession planning.

 

Have you created a road map?

Strategy should not be complicated, as it is the set of choices you make to help you deliver your goals.  It is your roadmap.

In thirty plus years of corporate life I have reviewed many.  Countless textbooks have also been written on the subject, but there are some basic principles that I firmly believe work best.  Namely, the vision should be clear, motivating, and understood by all in the organisation.  In addition, it’s important to remember ‘less is more’.  Too often strategy papers can be voluminous and complex.  The best strategy work I have seen is on one piece of paper with clear, simple articulation of the choices you will do and equally what you will not do.  It is very empowering to tell a team what you are not going to do.

 

Alan Sutherland

Have you established a core market?

In any business, the “core” needs to be healthy before you divert any significant level of resource to expansion, there are thousands of examples where enthusiasm to grow has caused companies to fail.

As you evaluate expansion, having an array of ideas and opinions needs to be balanced with a clear brand that consumers feel they relate to.  Whilst adding new products or services is an organic part of company growth it needs to be tempered, so you do not drift too far from your core market.

Therefore, before ploughing resources into new markets, you do need to ensure that new product and services will be of value to existing (or new) customers.  You may need to ask some critical and challenging questions such as, is there a clear need for this?  Is it marketable?  Does it sit within the brand equity?  How much will consumers pay for it?

If you conclude that the demand is there, only then should you move onto executing that new idea because it will require a significant amount of investment of time, resources, and money.  If the market entry cost is potentially high, you should also evaluate a test & learn approach by launching in a limited way and, if early traction is good, then expand.

Once you have revised your existing offering, you need to engage with these new consumers to increase brand recognition.  If your business is not online, add this to your to-do-list because in today’s era, convenience is key.

A website is the shop window to your brand and, done well, can allow you to build up a direct one-on-one relationship with your customers.  If it was already an important criterion before, the impact of Covid-19 will make it indispensable.

With social media and the abundance of mobile technology, it is not difficult nor expensive to drive traffic to your site, so you need to ensure the site is engaging, easy to navigate, informative with a call to action to purchase.  Loyal customers who return to your site are worth their weight in gold!

 

Do you have a healthy working capital?

Finally, a healthy working capital is essential not just for growth but for the day-to-day operations of running a business.  Even as you start to see your business develop, you must keep a scarcity mindset with cash and make sure you have some reserves for when something goes wrong. This has caused thousands of start-ups to fail as they hit unexpected turbulence and had no contingency in place.

In today’s global economy, there is a lot of uncertainty so there has never been a more important time to maximise liquidity to meet short term obligations and avoid going bust.  Not to mention, flexibility is key when a business is looking to expand and without enough working capital a business can lose this flexibility.

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BITCOIN COMES OF AGE

Katharine Wooller, Managing Director, UK and Eire, Dacxi

 

The Bitcoin halving event, which occurred on the 11th May, has been a watershed moment for the industry.   It has been a deafening theme for crypto narrative in recent months, and more recently has caught the eye of professional investors and conventional media alike, with some predicting it will be the catalyst for a substantial boom.   It appears bitcoin, finally, has a hard-won place in the mainstream.

 

Halving: In a nutshell

Bitcoin has a key feature; there are a fixed amount available, and, crucially it has a pre-programmed supply reduction built in.  The miners, who maintain the bitcoin network, validate transactions and add them to the blockchain when they are verified.  They do this at considerable electrical and computing cost and thus are paid in bitcoin. Periodically, the reward for doing so halves.  In the past this supply reduction, which previously occurred in 2012 and 2016, has coincided with a strong run-up in its price.

 

All grown-up

Bitcoin has now been in existence more than ten years and has survived the doubters, the scammers, the hackers, government attempts to quash it, and along the way it has given rise to new innovations using the blockchain technology that underpins it.  To overstate this amazing “survive and thrive feat” as well as the innovation it represents would be difficult.  Bitcoin, conceptually, has exceeded expectations.  Alas the 5,000+ crypto currencies that have sprung up alongside it include the good, the bad, and so very ugly.  Nearly all of these should fall away as Bitcoin dominates; at time of writing it is 67% of daily traded volumes.  Understandably, there is a very short list of 3 what we call blue-chip coins (LTC, BTC, ETH) that the institutional investors have shown interest in.

 

Solving some our largest problems

There is a clear appeal of digital currencies to the cashless internet economy based, including 24/7 price transparency that is available, cross border usage, divisibility to many decimal places, as well as third party oversight and controls. Bitcoin has been on a roller coaster ride over the last two years and has held its value throughout the current dramas and even increased in value as governments have stimulated their economies on a massive scale via printing cash endlessly to avert a market meltdown.  This is likely to create a massive inflationary environment into the future and sets the stage for Bitcoin to make its next move upwards after stocks and real estate prepare to reset valuations and attractiveness.

 

A new gold?

A lot of the dialogue around bitcoin talks about an improved version of gold, as a medium to convey value.  Improved by virtue of the technology being quicker, and cheaper to both store and move. Indeed, a recent transaction of $1.1bn worth of bitcoin, by bitfinex, cost $84.  Unsurprisingly this has caught the imagination of the financial infrastructure industry.  Some market commentators postulate a 10x increase in prices in the next 12 months, based on a few % of the global appetite for gold switching to crypto, with bitcoin being the heir apparent.

 

Diversification: Now

For the industry as a whole, it is great news that bitcoin is now demonstrably decoupled from traditional markets.    It is apparent that the price of Bitcoin is outside the traditional assets’ ecosystem, and the market is determined by a new set of criteria.  Bitcoin now has the crucial “social proof” that it cannot be altered by external forces, no matter how powerful, bringing much joy to the libertarians and retail investors alike.  Indeed, google searches for ‘bitcoin halving’ hit an all-time high in the late April, suggesting firm interest from newbies.  Further, the quality of exchanges available to both retail and institutional investors has improved substantially in recent years, providing a much-needed ease of entry into the market.

 

Professional Investors

Indeed, leviathan investors, such as Paul Tudor Jones, coming out in praise of bitcoin, as a viable hedge against inflation, saw bitcoin enter – unexpectedly – stage left to a much broader financial audience.  Bitcoin is viewed as what gold was in the 1970s, thus driving increasing interest from his fellow baby boomer cohort. Indeed, Dacxi, a digital exchange focusing on educating retail investors, saw some of its busiest weeks in the run up to halving.  The addition of global pandemic and imminent worldwide recession has been the perfect storm for the world to crave safe new assets.  Crypto is firmly out of the niche and into the zeitgeist.

 

What’s next

In my opinion, crypto has reached critical mass in terms of adoption. There’s no going back.  I was delighted to wake up in London on the 12th May and see the BBC reporting on halving – it doesn’t get much more mainstream than that!

As digital currencies become the increasingly dominant technology, anyone with an interest in markets and investing would be well placed to educate themselves on this seemingly unstoppable asset class.  With the recent momentum gained from the halving, crypto is likely to be a broader theme of daily life for decades to come.

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