INSURANCE is an industry that hasn't really transformed for a very long time. We still buy the same kind of policies from the same types of companies through the same channels. Unlike the banking and financial services space, insurance hasn't been disrupted enough. But that's about to change. According to a new study by GlobalData, Artificial intelligence (AI) provides unprecedented opportunities for the insurance industry, and the changes it can bring about will transform insurers forever.
Transformation may be the most frequently used word or concept in the entire insurance business today. It is commonly viewed as a program of significant changes to a business that is enabled by new technologies like analytics, robotics and the cloud. Typically, these tools replace or extend legacy systems with the goal of making operations more digitally enabled, agile and cost effective. The powerful technologies get all the hype, but their role is often overestimated. In fact, human and organizational factors are usually the most important in successful transformations, because without the right talent, culture and mindset, as well as the right operating model, transformation simply won't happen.
Digital expertise will become increasingly critical in the insurance sector as digitization and machine learning leads to more highly'automatable' insurance according to management consultants McKinsey & Company. Meanwhile a separate piece of research by Accenture found that insurance companies are accelerating the shift to a radically different distribution model, where they say digital will play an increasingly important role in most interactions, and were agents' efforts are being refocused to add more value. And analysis by research outfit Ovum suggests strong investment in digital channels also. According to Ovum, " When it comes to investment, digital channels remains the top area for insurers. However, the significant majority of insurers will be increasing budgets across a broad range of functional areas with no single activity completely dominating spend.
JUST a few months ago, businesses and citizens were complaining about the poor adoption of technology in the insurance sector. So, the leaders have responded by ramping up investments in new and emerging technologies to streamline operations, wow customers, and transform their business. Going by the solutions they're announcing, it seems that the industry is particularly keen on exploring the applications of artificial intelligence (AI) over other technologies. Their choice, of course, has been appreciated by customers. Most recently, Singapore Life, a digital native insurance firm launched an AI-powered chatbot, the SingLife Chatbot.
Artificial Intelligence Set to Transform Insurance Industry but Integration Challenges Remain, According to Accenture Report Insurers are investing in AI technology to enhance the customer experience, empower their own people NEW YORK; Apr. 19, 2017 – Insurance executives believe that artificial intelligence (AI) will significantly transform their industry in the next three years, with insurers investing in AI to empower agents, brokers and employees to enhance the customer experience with automated personalized services, faster claims handling and individual risk-based underwriting processes, according to Accenture's Technology Vision for Insurance 2017. At the same time, however, the report found that insurers face challenges integrating AI into their existing technology, citing issues such as data quality, privacy and infrastructure compatibility. Titled "Technology for People," the report is based on the insights of a technology advisory board, interviews with industry technologists and a survey of more than 550 insurance executives across 31 countries. According to the report, three-quarters (75 percent) of insurance executives believe that AI will either significantly alter or completely transform the overall insurance industry in the next three years. One-third (32 percent) believe that their own company will be "completely transformed" by AI within that timeframe, and an additional 39 percent believe that AI will "significantly change" their company.