Insurance firms must now adopt a new set of technologies to stay relevant and profitable in a market where customer preferences and expectations are completely different.
The insurance sector in India is on the cusp of a major change---one that’s driven primarily by technology.
Automation and digital technologies have already transformed the industry in many ways in the last five years. Increasingly, insurers today view technology as a business enabler, rather than an operational tool.
Insurance firms must now adopt a new set of technologies to stay relevant and profitable in a market where customer preferences and expectations are completely different. Technology hence lies at the heart of any customer-centric insurance company today.
As an industry where traditionally customers prefer active human interaction, adoption of new technologies like artificial intelligence and chatbots can be quite a challenge for insurers.
Finding the right use cases is going to be very critical for tech leaders in the industry. Here are some primary use cases of AI, chatbots and Blockchain that are likely to make an impact in the recent future.
AI & Machine Learning in fraud detection: The largest outflow of money for any insurance company is the payment of ‘Claims’ for customers. Fraud in claims have always been an area of concerns and focus for Insurance companies. AI and Machine learning can deepen fraud identifications capability in a very effective manner.
AI can process the fraud lookup across hundreds of parameters in a few seconds – which no human or standard rule-based systems could do. To top it, the self-learning capabilities of these technology can ensure that the rule set will be ever relevant.
This will additionally reduce the response time to customer during a claim as the decisions will now be driven by an AI engine.This will deliver two-fold benefit
- Reduce the incidence of frauds
- Reduced closure time for claims to customers
Chat Bots as a communication channel: Today’s digital customers are increasingly becoming comfortable running a conversation on chat to resolve their queries. In the near future, we will see a shift in customer engagement on the website to a ‘bot-driven’ and assisted journey. This will ensure that the customer can complete whatever he had set out to achieve. NLP and AI-powered bots can in fact ensure that the journey is simple.
Blockchain for customer-centric business: No insurance company can run business in isolation--No Claim Bonus Confirmation, for instance. An insurance company typically need to have confirmations from other insurance companies regarding its customer’s insurance claim with his previous Insurance company. The current model of confirmation is lengthy and requires the firm to go back to the customer even weeks after the policy is issued in case of discrepancy.
An industry Blockchain, I believe, can effectively address such scenarios. In this case by ensuring that the ‘No Claim Bonus Confirmations’ are real time for the participating companies, which prevent any hassle to the customer at a later date.
RPA for automated workflow: In an Insurance company, there are still multiple processes that require intensive processing through human intervention. Here is where Robotic Process Automation helps since it automates the entire processing with an automated workflow. These will help in meeting the outcomes of reduced cost (automated process over manual effort), faster throughput, lower operational risk (lower error since the process is automated) and higher scale without additional manpower.
The author is the CTO at Kotak General Insurance.