A Digital Dawn for the Insurance Industry

A new digital age has dawned for the insurance industry, which is facing the exciting challenge of moving its customer interaction strategy towards a model that is more attuned to modern channel-hopping behaviour and preferences. In a recent survey 69% of insurance professionals declared that their industry is moderately to severely behind in adopting digital technologies, 1 confirming that it is more urgent than ever for insurers to assess their level of digitalisation if they wish to experience continued growth.

Mobile

Specifically, with smartphone users in the UK predicted to reach 43.6 million in 2017, 2 mobile sales are becoming increasingly popular across sectors. The insurance sector can’t afford to overlook this channel which could be used for to provide apps and mobile optimised sites. Apps are particularly well-suited to delivering add-on services such as ‘find my nearest’ tools for car glass repairs, renewal reminders and support for reporting a claim.

Artificial Intelligence

Today’s consumers like to do their own research and often start their journey towards purchase on one channel, say a mobile phone, then move on to another channel such as the telephone or the web where they complete their purchase. In fact, many consumer like to use conversational Artificial Intelligence (AI) in the form of chatbots to interrogate the company about cover before they decide whether to buy or not.

In the future, however, AI is expected to provide way more than simple chatbot automation, understanding and mimicking natural speech, and to become a way of providing systems with suggestions that can help identify cross-selling or up-selling opportunities, achieving a whole new degree of effectiveness. In a Big Data-empowered world, AI may for example be able to provide predictive analysis and help decision makers with suggestions as to which segments of clients to target for a more profitable and lower risk investment or to automatically respond with an action to specific trigger-behaviour by consumers.

Social Media

Social media is also becoming increasingly important. There are interesting solutions that allow the conversation to start over social media, so for example via Facebook Messenger, and then be transferred to the website where the client can access more information and eventually be enabled to buy their cover.

Single Customer View

Another important issue is that of data integration and the single customer view. Far too often when a broker is sitting opposite a client or has them on the other end of the phone they are unable to draw up a single customer view that shows all the policies that the client has taken out such as for example home insurance, car insurance, business liability insurance, making it impossible for to offer timely and relevant offers.

Unfortunately, customer information in back-end systems, which are usually legacy systems, tends to be ‘siloed’ in different formats for the use of single departments such as P&C, L&H, Claims and Finance. It is, however, possible for experienced system integrators to collect data from these different systems and form a single repository for a complete and organic single customer view.

Trying to integrate back-end systems into one is a very expensive and time-consuming process, but creating new modern front-ends and integrating them with the different back-ends allows you to collect and pool all types of structured and unstructured data from various systems with greater ease. Big Data can further help in this, by enabling the creation of a unique data repository, regardless of the data source, whether it is internal or external, structured or unstructured data. Add to this the contribution of Artificial Intelligence and companies will be enabled to further improve strategy and decision making across the business in an over-arching Business Intelligence framework.

Managing a digital innovation project internally is difficult for most underwriters whose staff is already fully employed in carrying out their day-to- day tasks or who simply don’t have the required technical expertise. It is therefore highly cost effective to engage with a third-party consultant to help provide a roadmap of the process of improving user experience via greater digitalisation and to help implement or entirely outsource the process.

In the highly competitive insurance market, savvy consumers will not hesitate to defect to an insurer providing a more up-to- date and contemporary experience. As more and more insurers understand this and embrace new digitalisation-enabled business models, failing to keep up with the industry could be a very risky business indeed.

By Giuliano Altamura, Financial Services Business Unit Manager, Fincons Group