The insurance sector has a longstanding reputation for being resistant to change. Who can blame those who work in this industry? Avoiding risk is in their DNA.
Surprisingly, in my experience as a Silicon Valley insurtech serial entrepreneur, this characterization may no longer be valid. Since 2010, we have partnered with insurers to add technologies to improve their businesses. In our daily conversations with carriers and agents, we have seen a quickening in their adoption of new tools and new ways of doing business.
Agencies are taking some of the boldest steps forward when it comes to launching artificial intelligence (AI) projects. The past few years of heavy venture investment in insurtech has brought a huge array of tools to market that are solving palpable insurance business problems and providing quick and significant returns.
Early technologies tended to put distance between insurers from their policyholders. Phone auto attendants droning “Press one to talk to Sales” and voicemail that never seemed to get a return call. Artificial intelligence tools are different. They enhance and support the human connection and personal guidance that is core to the industry. Policyholders still want to feel like insurers understand them, empathize and listen. Customers continue to crave tailored recommendations and advice.
From underwriting, compliance, reporting, documenting, billing, quoting, so much time is spent on minutiae that the human connection gets shunted to the bottom of the priority list, and worse, the mundane or highly detailed tasks are simply wearing out the staff.
Allstate’s recent push to have personal lines agents also sell their commercial lines encountered significant challenges. Agents were starved for guidance on how to sell and support these products that were unfamiliar to them. Agents would call support lines causing delays and frustration and bogging call center queues. Allstate implemented an AI-enabled virtual agent called ABIe that “speaks” to agents to answer questions and guide them through sales and underwriting processes. ABIe handles 25,000 agent inquiries monthly, allowing personal lines agents comprehensive, instant support and freeing up the call center queues.
Customer service and sales departments appreciate the AI tools that help locate answers, take care of details and make sure workflows are as efficient as possible for the customer as well as the staff. This lets them focus on outstanding customer service instead of regulations, requirements and databases.
This smartphone ecosystem dovetails perfectly with AI tools that give consumers what they want and how they want it, thereby improving the customer experience. A new twist has emerged with the ubiquity of smartphones -- the preference for texting, chatting and messaging over calling customer service for assistance. Research has revealed that not only do over 75% of Americans own a smartphone, but most prefer to connect with brands online via web and mobile self-service interactions. Machine learning and natural language processing have found instant traction from carriers to agencies, despite some solutions being in the early stages of development.
Root, a recent entrant into the auto insurance space, connects with customers only via their smartphone app. The company sells insurance, monitors driver risk and connects with policyholders all via the phone app. Consumers benefit from the convenience of a well-designed app experience and a way to save by proving they are safer drivers.
Most well known of this set of tools are the customer-facing virtual insurance agents that have arrived in hundreds of varieties. Some live on agency websites, able to understand plain language questions and can also answer mirroring the customer’s own tone and vocabulary. Others are versatile, able to carry on conversations in WhatsApp, Facebook Messenger and on voice-enabled devices like Amazon Alexa. They are able to take care of insurance claims, handle questions about billing, take payments and churn out quotes by the thousands. The sophistication of the virtual agent applications is limited only by the insurer’s imagination. Connecting with the target market using approachable, human-like automation is helping insurers stand out to current and prospective customers.
Chinese and Babylonian insurance from thousands of years ago distributed risk and trust to facilitate commerce and the advancement of society. Blockchain continues this tradition. Digital transformation increases the speed and complexity of the insurance business, so there is a growing need for certainty, trust and automation in insurance transactions. With demanding regulatory compliance requirements, evolving fraud detection and mitigation needs, swelling numbers of third-party payments to make and a complex network of data sources, insurers can no longer work with manual processes and non-integrated systems. Blockchain promises trust and reliability among the market participants without the need to integrate with each and every system.
Blockchain applications are predicted to revolutionize all aspects of insurance, but a new product offering from AXA called Fizzy is a form of travel insurance that uses blockchain to transform travel insurance by automating reimbursement for flight delays and canceled travel.
As insurers gain more experience with a variety of technology offerings, they will discover the depth of transformation they can achieve. Machine learning methods applied to the volumes of data available to insurers make advanced analytics and business intelligence within reach to even small agencies. They can affordably track product performance, predict loss and fraud, offer products that make sense with AI automation and blockchain-enabled trust mechanisms and even work on designing new products for risks emerging during the current digital transformation. Advancements in AI, smartphones and blockchain unlock previously hidden business growth opportunities.