In my previous blog I outlined how advanced analytics could help Ireland’s non-life insurers address fundamental issues around winning and retaining customers, and reducing claims and litigation costs.
Today I want to take a look at what Artificial Intelligence (AI) could bring to the party – both on its own but also in conjunction with other technologies, including analytics. These two related fields are increasingly feeding off one another: the analytics underpins the offerings and provides actionable insights; and the AI is used to engage with customers and bring those offerings and services to life. But it’s not all about the rise of the machines. The real key to success hinges on insurers’ ability to integrate human and virtual resources, and to modernise their organisational culture and workforce along the way.
Three quarters of insurance executives (globally) believe that AI will either significantly change or completely transform the industry over the next three years, according to Accenture’s Insurance Technology Vision 2017 report. Keeping pace with technology that’s advancing at an exponential rate, rather than in a linear fashion, certainly won’t be easy. In fact, 86% of insurance executives feel they must innovate at an increasingly rapid pace simply to retain a competitive edge.
Insurers are investing in areas like deep learning and natural language processing, but the greatest investment and impact is expected to relate to embedded AI solutions – such as virtual assistants and chatbots. As a result, customer interaction is where much of the action is going to take place. 77% of insurance executives agree that AI will revolutionise the way they gain information from, and interact with, their customers.
Irish consumers are certainly ready and willing to engage with AI. 69% would be willing to receive entirely computer-generated advice about which type of insurance cover to purchase, according to Accenture’s latest customer survey. And why? Many customers think that computer-generated advice would be faster, more convenient and cheaper than human advice, and that the robots would be more impartial.
But what benefits will AI technologies bring to Ireland’s insurers and those who work for them?
For insurers, there will be considerable time and cost savings. With more internal processes and customer interactions being automated, people can be freed up to work on higher-value tasks. Like offering a more personalised, better quality of service to those customers who really need a human touch. AI will also help insurers to develop a deeper understanding of customers and risks, and to start leveraging hidden value from existing data. For example, accurately and fairly assessing flood risk has been a long-standing challenge to Irish property insurers; using AI to analyse new, external or non-structured datasets could revolutionise this. And employees will reap the benefits too. Less time spent on low-value, repetitive tasks and more opportunities to do meaningful, higher-value work that creates better outcomes for the customer.
Irish insurers have already started down the workforce modernisation path by opening new, more efficient premises. Three of our largest four underwriters have relocated some of their customer-facing or call centre staff in recent years. Rather than simply offshoring existing processes, the trend has been to keep those jobs in Ireland – while simultaneously improving processes in order to free up onshore staff for higher-value tasks.
Such relocations present many of the same opportunities as moving your family to a new home. It’s not just a case of boxing everything up at one end and unpacking it at the other. It’s also an opportunity to do some general cleaning and reorganising of your existing belongings, and perhaps to consider investing in one or two new items. Furthermore, making a few changes once in the new home feels easier than it did at the old house. And it’s the same for companies. Insurers who relocate some of their functions to newer, better premises then find themselves less encumbered by legacy technology and old habits. They’re ready to embrace a more forward-looking culture, and moving has provided an opportunity to design some of the new technology to really fit around, and enhance, their existing workforce.
Thanks for reading.