AI presents opportunity to show customers that insurance 'values' their data

Artificial intelligence (AI), machine learning and digitalisation are key words that those tasked with improving business processes in the insurance sector will be well aware of – but these tools also present the opportunity to show end customers that the insurance industry values them. Read: Amazon's online insurance store – what does it mean for the industry? Read: There will be'winners and losers' in insurance now more than ever – Guidewire This was according to Andy Fairchild, advisor and non-executive director at various insurance-related firms and owner of consultancy Julyfourth Services. Speaking during an Insurance Times webinar entitled AI: A driving force for the future of insurance yesterday (24 November 2022), in association with Inawisdom, Fairchild explained: "[AI] is how we can show customers that we value collecting their data more than we currently do. "We must, as an industry, show customers how important that data is and how important data collection for the provision of an insurance product is." AI processing of customer data and the use of AI-enabled chatbots to respond to customer queries would improve the customer experience by speeding up often slow customer journeys, said Fairchild. But the collection of data behind these operations has to be improved too. Fairchild continued: "We can get that customer data from a person-to-person interaction or – increasingly – from a person-to-machine interaction and therein lies a big move for the industry." Fairchild added that the better collection and deployment of data to construct AI models could transform customers' interactions with the insurance sector from a "trudge process" into something that "they really value". AI and machine learning also have the potential to "revolutionise" the insurance sector in terms of risk selection and pricing if data collection improves, Fairchild added. Read: Brokers embrace cloud technologies to'maintain competitive edge' He explained: "The fundamentals of our industry are risk, risk selection, the terms that we underwrite that risk selection on and the price that we put on it." However, Sameer Deshpande, head of enterprise architecture at broker PIB Group, said that the insurance sector was lagging behind other areas of financial services in its use of artificial intelligence. Deshpande explained: "There are a number of areas where [insurance is] still behind the curve – [for example,] manual processes and document processing.