March at The Fintech Times is all about insurtech and its many facets. With the industry making leaps and bounds over the past few years, insurtechs are providing the much-needed disruption of the traditionally viewed, and sometimes outdated insurance industry. From innovations in technology and applications to key industries like property, auto and energy, this month we’ll be taking a look at some of the key topics in the sector and how insurance really is the one to watch.
Looking to explore the innovations in the sector further, we sat down with Jovi Overo, managing director BaaS at Unlimint; Angus Panton, sales director, insurance, banking and financial services at Expleo; Steve Elliott, senior vice president of IT innovations at Sedgwick; and Olivier Baudoux, senior vice president at Mitchell:
Jovi Overo, Managing Director BaaS at Unlimint looked at how innovative technologies can provide more people with insurance across the globe. “In today’s world, technology plays a huge part in disrupting our lives as we know them. Technological developments like blockchain have started affecting the way we see GDPR and data. Insurance companies can now leverage the data gathered via telematics or wearables and displayed on marketplaces or blockchain, and tailor their offerings.
“In my opinion, the real impact that technology has made on insurtech is on opening up new opportunities for the underserved audiences in developing countries. In regions like Africa and Asia, there is still a large number of people, who cannot claim insurance and do not have insurance policies. With new technology insurance companies will be able to check data at a distance and be certain that the data submitted is realistic, thus minimising costs and opening up new opportunities for business growth.”
Angus Panton, Sales Director, Insurance, Banking and Financial Services at Expleo, said, “Like many industries, the insurance space is undergoing a deep phase of technological recalibration, paving the way for a new breed of innovation, insurtech. The global insurtech market is set for seismic growth in the coming years, propelled by innovations in artificial intelligence (AI), automation and data sharing that can greatly expedite claims processing, enhance providers’ customer service and mitigate risks of fraudulent activity.
“Now more than ever, customer-centricity and reliability has to be at the heart of business operations, with digital savvy customers rightly demanding ease of access to 24/7 support. Our recent Business Transformation Index (BTI) report found that 56 per cent of UK companies are seeking to improve how they deliver the best customer experience through digital transformation. Chatbots are a great way of reducing call volumes, but the user experience has to be seamless and secure. Before deployment, it is essential that robust testing of chatbots is carried out to ensure the most accurate and pertinent information is parlayed through the automated communications, and the response times are as rapid as possible. Process automation can streamline multiple data sources, enable bots to add data to the work queue and facilitate swift processing, helping customers adjust or seek clarity on details relating to their insurance policies.
“At a macro level, the European Insurance and Occupational Pensions Authority has already started a conversation about open insurance frameworks, in which personal data can be shared between market participants via APIs. Perhaps we could see competitors engaging in secure data collaborations to verify client information and flag duplicate claims. Looking ahead, the scope of insurtech innovation is boundless, but it is mission-critical for any prospective digital transformation initiatives to be executed in a consistent and methodical manner.”
Steve Elliott, senior vice president of IT innovations at Sedgwick echoed Panton’s thoughts: “The insurance industry is changing from multiple directions. Internally, companies are presented with opportunities to leverage AI in new technologies such as predictive analytics, chatbots, image recognition, damage estimates, improved data collection through devices, telematics and more robust reporting. Externally, the expectations of everyday consumers are changing dramatically by their everyday experiences with technology. The next generations of connected consumers expect instant responses and access to information at their fingertips, driving the insurance industry to be more automated and responsive to personal needs.”
Elliott did not believe that technology could exclusively solve all issues though. “However, the trajectory of our industry is not towards the full automation of existing processes. The human aspect of claims management is still very much needed. The optimal destination for insurance companies is to leverage AI to automate and expedite the claims process while working with professionals – these ‘cyborg processes’ will ultimately transform our industry.
“The most successful companies will adapt to use AI to predict claim risks around fraud, litigation, unusually high medical costs or complexity. It’s not only for resolution, but also to assign the appropriate people to the claim. While AI can be used to identify the low-touch, ‘fast track’ style claims to be automated, bringing real people like specialists to bear on a claim will define the experience of the claimants and really drive improved outcomes.
“At the end of the day, consumers drive an industry. Some consumers with claims want speed and accuracy in their incident processing. But many who have really suffered a loss need a more human touch. Using technology to identify the appropriate needs of a claimant and ensure they get the right level of speed, the correct level of empathy and the best care possible is the real direction in which the successful companies are heading.”
Olivier Baudoux, senior vice president at Mitchell, looked at the bigger picture, analysing the pandemic’s impact and how this has affected predictions for the future.
“Over the last two years, there has been a rapid acceleration in technology adoption due, in large part, to the pandemic. Nowhere is this more evident than the insurance sector. Acting has a catalyst for digital transformation, covid-19 has fast-tracked the industry’s embrace of solutions powered by AI and other advanced technologies.
“Thanks to the growth in cloud computing, availability of open ecosystems and access to big data, AI can be used to detect a car accident through computer vision and IoT technologies, process a payment for completed repairs, and everything in between. One of its greatest potential uses for insurers, at least initially, is to deliver a truly “touchless” estimate using photos or videos of the damage to populate individual lines on the appraisal. In fact, LexisNexis Risk Solutions predicts that by 2025, more than 80 per cent of claims processed will be virtual, and up to half of non-injury claims fully automated.
“While the transition from onsite appraisal to touchless estimate is an evolution, the benefits are significant. AI-enabled automation can improve productivity and efficiency, allowing appraisers to remain focused on the most complex, high-severity claims. It can also provide greater estimate consistency, shorten the time from first notice of loss (FNOL) to settlement, and help carriers meet policyholder expectations for a streamlined, digital claims experience.
“McKinsey & Company predicts that by 2030, more than half of current claims activities will be replaced by AI-enabled automation. Organisations that embrace this technology to deliver a digitally driven claims process are best positioned to gain both market share and consumer loyalty.”