By Kannan Amaresh, Senior Vice President & Global Head Insurance, Infosys
The global insurance industry is on the brink of a significant technology-driven, revolutionary transformation. The integration of artificial intelligence (AI) and other advanced technologies has upended traditional insurance business models, paving the way to new strategies for success. The result is a boost in operational excellence through a collective ecosystem of allied industries and modern technologies for enhanced customer service and experience. Insurtech, or the future of insurance as we know it, is already here.
With every leap in technological advancement, the InsurTech industry is evolving alongside a growing economy. Insurers, as the ‘guardians of global economic risks,’ stand to benefit from cost reductions, fraud detection, better customer understanding, and automated processing. Customers, on the other hand, gain from greater personalisation, efficient interactions, intelligent risk assessment, and fast-tracked claims management. AI and advanced technologies are, therefore, able to generate value by helping InsurTech companies surpass industry expectations. With a nuanced understanding of customer needs, AI has the potential to help the industry transition from a state of detect-and-repair to predict-and-prevent1.
The Role of AI in Insurance
The complex insurance space is geared to become a semi-automated industry. InsurTech, with the new wave of predictive insurance analytics, machine learning (ML) algorithms, and deep learning techniques, is a powerful driver of this transition. These technologies are set to empower insurers with automatically identifying, assessing, and underwriting risks, while recognising new revenue sources and delivering value to customers.
Benefits of Predictive Insurance Analytics
Insurers deal with enormous amounts of data in their business. ML-powered insurance analytics assists InsurTech companies in optimising the data for informed decisioning, understanding customer behaviour, and achieving competitive business growth. By analysing historic data and leveraging ML-based image recognition, AI can help analyse patterns in customer behaviour, assess damage, and expedite claim approval.
With AI automating most tasks, there is significant reduction in manual error, leading to potentially outsized business gains. The resultant streamlined processing accelerates the speed of operations, enables increased efficiency, and minimises bottlenecks in responding to customer needs. While staying aligned with market dynamics, it helps elevate industry standards in fraud detection and risk assessment. Deep learning neural networks and ML algorithms can identify anomalies in claims data, curbing the risk from fraudulent activity while keeping the integrity of the industry intact.
Digital-first InsurTech companies have the advantage of speed, accuracy, and trust2 through AI-enabled automation. While speed and accuracy foster trust, together the triad can cement customer loyalty. With trust at the core, environmental, social, and governance (ESG) issues3 are taking centre-stage at InsurTech companies as customers increasingly seek proof of commitment. Insurers can also use ESG analyses in risk management, underwriting, pricing premiums, and triaging submissions for high-risk assessments. In summary, robust data management, insurance analytics capabilities, big data, automation, and blockchain technology can win the game for insurers.
Europe’s Evolving InsurTech Scene
Insurers face a very different regulatory regime now than they have in decades. In Europe, specifically, several countries have implemented or are considering regulatory sandboxes for the InsurTech industry. The European Blockchain Regulatory Sandbox4, which includes distributed ledger technologies (DLTs), is one such initiative of the European Commission (EC). These controlled environments empower insurers with the opportunity to explore alternative insurance innovations without the burdens of compliance. Similar sandbox models have been adopted worldwide, reducing regulatory barriers while enabling innovations in step with the latest in insurance technology.
While several countries have set up accelerators and support programs conducive to innovation, the extension of open banking and collaborative ecosystems5 is fostering the creation of new insurance products and tech-driven distribution channels. Despite the focus on safeguarding cybersecurity and data, the advancement of technology poses newer risks6. The ongoing global economic downturn, social inflation, rising healthcare costs, increasing natural disasters, and evolving regulatory frameworks have led to the universal challenge of record-high claims costs. AI can address these challenges through predictive risk assessment, intelligent policy pricing, claims automation, personalised risk mitigation, underwriting precision, and data-driven customer analysis.
Insuring the Future
AI is set to transform the globally interconnected insurance landscape as it stands at the threshold of innovation and ease. Its goal is to help detect and prevent risks, embrace innovation, and strive for operational efficiencies, even while complying with regulatory requirements. As global insurers navigate uncertainty, they are aiming to grow more resilient, adaptable, and agile, with a commitment to safeguard their customers against evolving threats.
Kannan Amaresh, Senior Vice President & Global Head Insurance, Infosys
Kannan Amaresh is the Senior Vice President and Global Head of Insurance at Infosys, bringing over three decades of industry experience. In his current role since 2018, he leads global insurance vertical, fostering client relationships and driving new client acquisitions across key markets. Kannan is passionate about leveraging technology for business model disruption and applies a unique “Speed, Accuracy, Trust” (SAT) approach to address customer challenges.
Kannan chairs the Infosys Insurance Advisory Council and is a frequent speaker at events and webinars, promoting industry thought leadership. His leadership reflects Infosys’ core values of excellence, trustworthiness, and industry leadership. Kannan is also a strong advocate of Diversity and Inclusion, embedding these principles into his leadership style.
Kannan is a member of the Institute of Chartered Accountants and holds a patent pending in the USA for his work on passionate about inventing, with a patent pending in the USA for his work on ‘Predicting [1]Financial Impact of Business Frameworks’. Beyond work, he enjoys tennis, F1, and NBA.
