6 Tech priorities for Insurance Companies for next 18-24 months

Changing Consumer Behaviour over the last decade

Over the period of last 20 years, as Internet invaded businesses and became inherent part of business models, consumer preferences have altered significantly. Consumers of Insurance businesses are no exception to this phenomenon. Insurance Consumers now need:

1. Simple and easy to understand Insurance plans and processes
2. Highly personalised & Unbundled coverages which they can select based on their choices / requirements
3. Insurance plans and related services, cusomers can decide about, procure and have them delivered quickly / instantly
4. Ability to deal and transact with systems and devices of the digital economy

As a result, insurance companies now have to establish business model: product & service offerings, distribution of products and services, operations (new business, policy servicing and claims), which will meet above customer expectations. Technology domains that will enable such business model and which Insurers will need to focus in next 18-24 months are discussed below.

Key Tech Domains for Insurers

1. Artificial Intelligence

Artificial Intelligence involves building cognitive intelligence using machine learning and deep learning models/algorithms. AI capabilities can be used in many areas such as:

• BOTs (voice / text) for customer interactions for customer acquisition or servicing
• Recognition and Reading of KYC Documents
• Recognition & Reading data from Business Documents such as Hospital Records, Medical Records, Garage Bills
• Agent / Distributors training
• Medical Underwriting
• Claims Approval
• Voice to text of customer interactions captured over calls
• Call Recording Analysis of call centre agents

Impact Areas: Distribution, Operations – New Business, Policy Servicing, Claims

2. Robotics Process Automation

Robotics Process Automation (RPA) involves software robots carrying out repetitive manual tasks performed by humans. RPA is gaining ground in Insurance industry and many companies in India and overseas have started using RPA to automate tasks in many operational areas such as:

• Data entry from excel into Core Insurance,
• Accounting or other back office systems,
• Reconciliation of Payments / Taxes with Bank statements,
• Generation of Quotations for Group Business from various data sources, etc.

With the aid of Artificial Intelligence, RPA is even used for performing complex tasks e.g. entry from printed documents like Hospital bills, Garage bills, Health Reports, etc.

Impact Areas: Operations – New Business, Policy Servicing, Claims

3. Internet of Things (IoT)

Internet of Things (IoT) involves data collection devices connected to Insured assets / individuals and using this data to offer highly personalised premiums and services.

Applications of IOTs are devices such as:

• Fitness bands collecting data about health parameters of humans for health insurance
• Telematics devices collecting data about car engines, travel patterns, quality of driving and car maintenance for Car insurance
• Sensors and devices collecting data about soil, weather and plant growth, etc. for agriculture insurance

Impact Areas: Operations – New Business, Policy Servicing, Claims

4. Mobility: Mobile / Tab based apps

Smart phones and Tablets have been around for more than 10 years now. Tab based apps in the hands of distributors to acquire new business have been found to be extremely effective. They allow organisations to transform paper based process into paperless and completely digital. They also enable organisation to issue & deliver policies instantaneously.

Impact Area: Distribution, Customer Service

5. Advanced Analytics

Advanced Analytics is branch of analytics leveraging statistical and AI/ML models used for predictive analytics in areas such as:

• Cross sell and Upsell
• Lead Profiling
• Agent performance and productivity
• Propensity to fraud of new business applications
• Persistency of Insurance policies
• Claims fraud detection
• Litigation propensity

Impact Areas: Operations – New Business, Policy Servicing, Claims

6. Microservices

Microservices is a new architecture methodology / technique evolved from Services Oriented Architecture. Microservices based software systems are highly scalable, make possible distributed deployment and are interoperable.

Impact Areas: IT Management

Reproduced from: Wanders Through The Mist