Many articles have popped up in recent weeks predicting what lies ahead for the insurance industry. Technology trends mentioned include Artificial Intelligence, Predictive Analytics, Internet of Things (IoT), Big Data, and the Customer Experience. Both Artificial Intelligence and the Customer Experience have crept into this list since last year.
Although consumerism was mentioned on the list last year, there seems to be a development whereby insurers are reacting to what consumers want and how they would like to interact with their insurer. Rather than just customers being able to access claim data through an online portal, insurance purchasing patterns have been changing.
No matter what the demographic breakdown of your customer profile, millennials probably account for a large percentage. Countless articles over the past twelve months have been talking about the difference in consumers based on their age demographic, and I couldn’t agree more. I think one thing we can all agree on is that we, as consumers, have a different attitude towards shopping today compared to a few years ago.
No matter what age demographic you fall into, it is likely that you will research items online before purchasing, or discuss with a friend or family, particularly for an expensive purchase or something that is deemed risky, such as insurance.
As consumers, we tend to trust friends, and other consumers more than a company themselves. I mean how many times has a salesperson failed on their promise? Online research might involve using an insurer’s website, or online customer reviews, on independent websites or social media, to make a judgment before reaching out to an insurer. So no matter how great or positive your marketing and sales efforts are, if your existing or past customers are dissatisfied, and share their experience with a potential customer, it will affect a consumer’s view of your company. Not to mention the fact that a customer is more likely to write a review of your product online if they are dissatisfied.
Now consider how you, as an insurance company, interact with your customers. When they visit your website, can they fill in a form requesting you to return their call? Do they need to contact a call center and be put on hold before they can speak to a person? Can customers log into an online portal to check the status of their claim? Making it easier for consumers to get access to the information they want is key to keeping your customers satisfied.
According to PwC, Artificial Intelligence (AI) is the result of exponential growth in computing power, memory capacity, cloud computing, distributed and parallel processing, open source solutions and global connectivity of both people and machines. AI enables us to gather masses of structured and unstructured data, speedily process it, and generate meaningful insights from it.
AI moves forward with the idea of claims automation, big data, and predictive analytics, to develop insurance systems that are capable of performing tasks that previously required human intelligence and manual processing. Today, search engines and virtual assistants are using AI.
As AI is introduced into the insurance industry, it will aim to make the life of an insurance agent easier. Current customer-facing tasks, underwriting and claims processing issues could be dealt with using sophisticated systems for precision, efficiency and improved automation in the future. In fact, Fukoku Mutual Life Insurance, based in Japan has recently replaced 34 employees with an AI system that can calculate payouts to policyholders. Although the system will reduce the time to calculate a payout, a member of staff will still approve the amount before payment. So who knows where it will take us in the future, but it will be an exciting development to watch.
Last year, Salesforce introduced Salesforce Einstein into the core of the Salesforce platform, which will enable users to bring AI into business technology. For us at ClaimVantage, this is an exciting development as this will allow us to build AI-powered applications in the future.
Although these both sound like exciting developments, in theory, the most exciting part will be watching how they become integrated into the insurance industry for companies like Fukoku Mutual Life.