How Artificial Intelligence Is Providing A Great Opportunity For The Insurance Industry
According to the research done by Genpact, most of the insurers are planning to invest millions in AI by 2020 — and more than half want to transform their existing business processes over the next three years because of AI.
However, across the insurance industry, more traditional methods of data management are still prevalent — despite being inefficient and detrimental to the user experience.
With each passing year, the shortcomings of legacy data management systems become more exposed by digital transformation. In particular, because data tends to be siloed across disparate systems, there is often a stark disconnect between different lines of insurance using client data for their own needs, which causes multiple data sets to be created when only one is needed.
If a client wants a quote on insuring a car when they already have home and contents with the same insurer, all of their data needs to be rekeyed. This impacts on product development, customer acquisition, claims processing and business innovation. This not only detracts from the customer experience but also significantly raises the potential for errors and inaccuracies creating gaps in the data.
Unsurprisingly, the amount of time that insurance companies spend on inefficient back-office data processes like these is massive. As much as 80% of a data scientist’s time is spent cleaning data because of the way the data was previously managed, according to a study by Gartner.
This is a huge waste of resource, both in terms of the data scientists’ time (and the loss of output and innovation they could otherwise be brought to the business) and the cost of their employment. These inefficiencies also contribute to poor customer outcomes, leaving clients feeling frustrated when they are asked to provide the same data repeatedly to their insurer.
Gaining an edge using AI
By contrast, those businesses that have embraced digital transformation have a competitive edge. AI-based systems can now offer a much more personal experience by maximizing the potential of technologies like straight-through processing. Insurers are using AI to make smarter underwriting decisions, manage and price risk more accurately, spot fraud and create better customer experiences.
But all is not lost for brokers. With insurers starting to make the most of AI, it’s time for them to adapt to their new circumstances. Customers will always value trusted advice, so the brokers who are determined to move with the times will keep their place in the chain. They have a huge opportunity to improve the service they offer; they can, for example, provide quotes in a matter of minutes when this would previously have taken a couple of days at the very least. Brokers who take advantage of the new opportunities AI brings will continue to thrive.
To get the most out of AI, it is essential for firms to have high-quality data management, stored and accessible across multiple channels and products, connecting anything and everything customer-related throughout the various lifecycle stages from quote through to claim. The results AI produces will only be as good as the data the AI is given. To date, this hasn’t always been the case for many of the big insurers, but this will change as insurers aspire to have one set of current, consistent, accurate, reliable data that can be used across the business.