Solving for digital outcomes

It’s no longer enough just to offer a com­pet­i­tive price as clients now want an insur­er that ful­ly under­stands their busi­ness and needs, and offers a per­son­alised, dig­i­tal expe­ri­ence. They expect their insur­er to go beyond tra­di­tion­al risk cov­er­age to a risk-pre­ven­tion mod­el.

With a soft­er econ­o­my, increas­ing insurtech com­pe­ti­tion, ris­ing cyber-risks and expand­ing reg­u­la­tion, insur­ance firms are look­ing to dri­ve for­ward inno­v­a­tive ini­tia­tives and projects to retain a com­pet­i­tive advan­tage, as well as com­bat emer­gent risks.

“It’s a per­fect storm. Cus­tomers are demand­ing a lot more in a dif­fi­cult envi­ron­ment for insur­ers that also need to pro­tect them­selves against dis­rup­tors,” says Sud­hir Chaturve­di, pres­i­dent of sales and exec­u­tive board mem­ber at Larsen & Toubro Infotech (LTI), a glob­al tech­nol­o­gy con­sult­ing and dig­i­tal solu­tions com­pa­ny.

Through lever­ag­ing expo­nen­tial tech­nolo­gies, such as arti­fi­cial intel­li­gence (AI), the inter­net of things (IoT), blockchain and data ana­lyt­ics, insur­ers can trans­form the cus­tomer expe­ri­ence and ensure they are stay­ing ahead of start­up com­peti­tors. The cur­rent dom­i­nant mod­el in the insur­ance indus­try where firms offer sim­i­lar indem­ni­ty prod­ucts and com­pete pri­mar­i­ly on the basis of price is out­dat­ed and lacks refine­ments. It is notably high-touch expe­ri­ence via an omnichan­nel approach and val­ue accu­ra­cy that con­sumers expect.

In an increas­ing­ly com­pet­i­tive mar­ket, new mod­els need to be devel­oped that more close­ly match con­sumer expec­ta­tions

By embrac­ing a more holis­tic approach, there is a major oppor­tu­ni­ty for insur­ance com­pa­nies to become clients’ cog­ni­tive risk advis­ers, to help them across their entire risk port­fo­lio. This shift from offer­ing a sim­ple indem­ni­ty prod­uct to becom­ing an inte­gral busi­ness advis­er can best be achieved when the right tech­nolo­gies are imple­ment­ed into oper­a­tions.

“The indus­try has already adopt­ed telem­at­ics suc­cess­ful­ly, and we are see­ing a lot of inter­est in adopt­ing IoT for insur­ing smart homes, smart plants and ensur­ing safe­ty of work­ers. The adop­tion will accel­er­ate over the next 18 to 24 months, main­ly due to the growth of IoT solu­tions, IoT net­works and 5G solu­tions. Intel­li­gent IoT devices are becom­ing cheap­er with 5G enabling devices to feed­back real-time data, which will be invalu­able to insur­ers,” says Mr Chaturve­di.

One of LTI’s insur­ance clients insures more than 2,000 church­es in the Unit­ed States and is mak­ing use of the inte­grat­ed sen­sor tech­nol­o­gy pro­gramme to bet­ter ser­vice these cus­tomers. The main­te­nance and upkeep of church­es is usu­al­ly an expen­sive propo­si­tion,  due to their typ­i­cal­ly old age and the fact that they must con­tend with every­thing from leaky roofs to sub­si­dence.

In this con­text IoT devices can enable the tran­si­tion to a more proac­tive ser­vice, by auto­mat­i­cal­ly mon­i­tor­ing envi­ron­men­tal aspects such as heat, humid­i­ty and water lev­els. Insur­ance com­pa­nies can ben­e­fit from a low­er num­ber of claims and their cus­tomers will be able to bet­ter man­age their prop­er­ties.

“We can act much faster when we have access to data in real time. We can actu­al­ly locate where the prob­lem is much quick­er than before, and gain an imme­di­ate abil­i­ty to under­stand the exact sit­u­a­tion the client finds them­selves in and help them man­age their risks,” says Mr Chaturve­di.

Mov­ing away from offer­ing a sin­gle prod­uct to being vital risk advis­ers who help man­age risks is the next step for for­ward-think­ing insur­ance com­pa­nies that want to make the most of the oppor­tu­ni­ties cre­at­ed by inno­v­a­tive tech­nolo­gies. In an increas­ing­ly com­pet­i­tive mar­ket, new mod­els need to be devel­oped that more close­ly match con­sumer expec­ta­tions.

In an age of per­son­alised and tai­lored expe­ri­ences, the insur­ance sec­tor can use the details they already pos­sess about their clients to estab­lish a unique risk pro­file and use AI-backed tools to only offer the most rel­e­vant ser­vices. There is an oppor­tu­ni­ty to cre­ate a long-term rela­tion­ship with clients who deeply val­ue the ben­e­fits of hav­ing an insur­er that knows their needs in depth.

“Con­sumers will always remem­ber a well-han­dled claim and, if they believe their insur­er is proac­tive­ly offer­ing a ser­vice that suits their require­ments almost per­fect­ly, they will think twice before switch­ing. And, of course, a loss-ratio reduc­tion by 2 to 4 per cent using cog­ni­tive claims is also quite help­ful,” says Mr Chaturve­di.

AI-backed tools have a tremen­dous poten­tial for automat­ing claims process­es and there­by improv­ing cost effec­tive­ness and cus­tomer expe­ri­ence. For exam­ple, LTI lever­aged its Mosa­ic AI plat­form to auto­mate pro­cess­ing of fend­er-ben­der acci­dent claims by analysing pho­tos of dam­aged vehi­cles to iden­ti­fy the dam­aged parts and esti­mate the pay­ment. There is still a cen­tral role for the expe­ri­ence and judg­ment of trained insur­ance pro­fes­sion­als, but their skills can be aug­ment­ed by these new data insights.

“The most dif­fi­cult part of mak­ing AI work is to con­tin­u­ous­ly fine-tune mod­els until a desired lev­el of accu­ra­cy is achieved. With our invest­ments in Mosa­ic tools, such as AI Tutor for Insur­ance, we make it easy to train, test and fine-tune mod­els by lever­ag­ing in-built insur­ance vocab­u­lary,” says Mr Chaturve­di.

Recent tech­no­log­i­cal devel­op­ments will be impor­tant in many dif­fer­ent aspects of the insur­ance indus­try, but one of the eas­i­er ways to put the ben­e­fits of these solu­tions into prac­tice quick­ly is through reduc­ing the admin­is­tra­tive bur­den.

“The oppor­tu­ni­ties for automa­tion in insur­ance are tremen­dous. There is a lot of intel­li­gent automa­tion that can be done, which will actu­al­ly enhance the pro­duc­tiv­i­ty of peo­ple and keep admin­is­tra­tive tasks to a min­i­mum to allow staff to focus on cus­tomers and rel­e­vant risks. Automa­tion for straight-through pro­cess­ing is a key enabler for improv­ing oper­a­tional effi­cien­cies,” says Mr Chaturve­di.

LTI is work­ing with its clients on some of the excit­ing solu­tions to lever­age blockchain as a trust­ed source for cer­tifi­cate of insur­ance or for pre­mi­um account­ing, assist­ing a wide range of stake­hold­ers, includ­ing bro­kers, car­ri­ers and rein­sur­ers. The com­pa­ny has devel­oped many blockchain-based use-cas­es for cus­tomers, such as smart con­tracts, proof of insur­ance, cat­a­stro­phe bonds and auto­mat­ed pay­ment of claims based on para­me­terised trig­gers.

Insur­ers need a reli­able part­ner with the right exper­tise to become a data-dri­ven insur­er of the future or they run the risk of con­tin­u­ing to lose out to insurtechs that are already tak­ing some of the pie from the tra­di­tion­al play­ers. Gain­ing access to high-qual­i­ty tech­no­log­i­cal tal­ent is extreme­ly dif­fi­cult in the cur­rent job mar­ket where there is no short­age of attrac­tive job oppor­tu­ni­ties.

By part­ner­ing with LTI, com­pa­nies in the insur­ance mar­ket can instant­ly gain access to a diverse range of top-end AI, big data and automa­tion skills. LTI can prove instru­men­tal in unlock­ing new sources of rev­enue and estab­lish­ing future-proof busi­ness mod­els that are well suit­ed and adapt­able to the often dis­rup­tive insur­ance sec­tor.

For more infor­ma­tion please vis­it lntinfotech.com