Increasingly digital customers are demanding more from insurers. They want help preventing injury and loss. And insurers who re-invent their offerings with AI capabilities will be poised to deliver.
It’s no surprise expectations are elevated. Real-time, personalized recommendations in digital services have become ubiquitous. Online shopping and entertainment streaming services continually use customer insights and prescriptive analytics to make recommendations.
Insurance customers now expect that level of personalization to help them achieve better health and overall well-being—especially Millennial and younger consumers. Our Insurance Consumer Study 2021 shows that while every age segment has growing interest in digital offerings that help them make safer, healthier, and more sustainable choices, more consumers aged 34 and younger say they want this kind of help.
The future of insurance must include re-invented offerings that defy the traditional indemnity model. Putting AI at the heart of the data-driven re-invention of offerings will put the insurer closer to the customer and help maximize the lifetime value of the customer relationship.
Beyond connected devices
Much has been made about the health and safety benefits of wearables and other IoT connected devices. However, re-inventing the insurance offering goes beyond capturing user-generated data. What matters is what the insurer and their ecosystem partners do with that data when they get it.
Predictive and prescriptive analytics capabilities can enable a more relevant and personalized digital insurance experience with real-time offers based on known behaviors and preferences. This forms the basis of insurance offers tailored to the customer’s unique needs. And it moves the insurer beyond the limitations of customer attribute data like demographics and income.
Human + Machine can feel more personal
It would be a mistake to think personalized insurance will become an AI-only proposition. Customers of all ages still want and expect the human touch. They simply trust humans more than machines to help them make high-stakes decisions.
As my colleague Michael Reilly put it in his blog post on Enabled Underwriting, “the choice carriers face right now isn’t a binary decision of whether the human or the machine should underwrite the risk. Rather, it is a question of how best to leverage machines to help human underwriters more consistently make profitable underwriting decisions.”
On the claims side—especially for auto and homeowners customers—leading with AI is already doing wonders. It expedites the claims process and gives the customer more control over the process. Meanwhile, those efficiencies help reduce costs for the insurer.
Personalization in commercial lines
Data-driven re-invention isn’t limited to personal lines of business. Commercial insurance customers also see what’s possible with technology and will begin to expect holistic offers that help them prevent, mitigate, and recover from loss.
To that end, cyber coverage is low-hanging fruit for insurers. The loss of in-person operations in response to COVID-19 and the simultaneous expansion of digital operations greatly expanded the cyber-attack surface. In addition to their usual day-to-day data security and virus protection hygiene, businesses of every size are now coping with the increased threat of ransomware and wiperware.
I’ve said many times that the insurance sector can serve as an important source of strength during the crisis and as a recovery mechanism for industry. With data-driven re-invention enabled by—even led by—AI solutions, the insurance sector can also serve as the guardrail that helps the customer steer clear of trouble.
Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors.
