The insurance industry is going through a transition. A technology-first operational model driven by data is taking centre stage, disrupting traditional approaches.
Customers today are increasingly tech-savvy and demand insurance services that are fast, convenient, transparent and easily accessible. They want to be able to compare offers, seek advice, buy and modify insurance policies, and make claims from anywhere, at any time using their mobile devices or computers.
Traditional agent-based channels continue to remain vital but must coexist with digital models, creating a hybrid approach to insurance service delivery. A survey by EY found that 44% of customers prefer to purchase insurance online, while only 12% prefer to purchase in-person or over the phone. With access to advanced analytics and data-driven insights, agents can focus on providing clients with personalized recommendations and risk assessments based on their very specific needs, shifting their roles from sales to becoming deeply informed consultants and advisors.
With rapidly evolving market dynamics and customer behaviour, one of the critical tools that insurers are increasingly relying on is Business Intelligence (BI). BI involves the process of collecting, analysing, and presenting data in a way that helps in making informed decisions. It is increasingly being used by Insurers to analyse customer data, market trends and other relevant information to gain insights into customer behaviour, identify new business opportunities and optimise operations.
Intelligent automation is another rapidly growing area in insurance. Advanced technologies like artificial intelligence (AI), machine learning (ML) and robotic process automation (RPA) are being harnessed to automate routine and repetitive tasks. This streamlines processes like claims processing, underwriting and customer service. It also enhances customer experience by providing more tailored and responsive services. A report by Deloitte found that insurers are increasingly using automation to improve customer experience, with 69% using automation for customer service, 59% using it for customer onboarding and 65% planning to use it for claims processing.
The combined power of BI and intelligent automation is driving innovation in several key areas. Insurers use BI to analyse customer data and identify preferences, enabling them to offer more relevant products and services. BI also helps insurers identify potential areas of improvement in service, resolve issues and anticipate customers' needs. A personalised, efficient and effective service leads to improved customer experience, higher customer loyalty and retention, and drives long-term profitability and growth.
Intelligent automation is being used to streamline the claims process from initial intake to final pay-out, reducing the time it takes to settle claims and improving overall efficiency. This can lead to significant cost savings for insurers as well as faster turnaround times and improved customer satisfaction.
Insurers are also using BI to analyse vast amounts of data from customer behaviour to market trends and internal operations to identify potential risks and opportunities. For example, devices in vehicles monitor driving patterns, or wearable devices monitor patients’ health parameters and activities. Analysis of this data provides vital insights on customer actions, health, criticality and risk. This leads directly to developing better risk models, improving underwriting decisions and managing claims more efficiently. Insurers can thus provide personalized and affordable insurance products to their customers and have a competitive edge.
Further, automated claims processing helps Insurers detect fraudulent claims and identify patterns that could indicate potential fraud. KYC and onboarding verifications can be automated and real time analytics help in flagging compliance issues right at this stage and mitigate any future risks.
Another instance of this transformation is the use of chatbots and virtual agents. These applications use natural language processing and machine learning to answer customer queries, provide personalised recommendations and assist with claims processing. With the capability to handle a high volume of inquiries and provide 24/7 support, convenience and speed, they have become very popular, freeing staff to focus on more complex issues. At the same time, analysing the data gather yields valuable data on customer behaviour and preferences, which can be utilised effectively for product development and marketing strategies.
In conclusion, BI and intelligent automation are driving significant improvements in the insurance industry, providing insurers with the tools they need to remain competitive, efficient, and customer focused. As the industry continues to evolve, these technologies shall play an increasingly important role in enabling insurers to meet the changing needs of their customers.
The author is Principal Solution Architect at Intellicus Technologies.