Data brings competitive edge to insurance

Insurers understand all too well the value of managing data and extracting meaningful insights from it. But as the number of data points continue to grow exponentially thanks to the Internet of Things (IoT), cloud computing, and social media platforms, those who are best able to leverage a digital-centric approach to derive business insights accurately and timely while assessing risk, will be the ones strongly positioned for success in a modern business environment.

As touch points expand by the day, relying on only a contact centre, email address, and website to deal with customer engagement is no longer sufficient. Instead, attention now turns to how best to analyse unstructured data generated through social media, chat bots, mobile messaging, and the like. Whether it is a Facebook mail, a WhatsApp instant message, a Twitter direct message, or data received from an IoT device at the edge, insurers must better track, manage, and analyse data at each of these points.

This has seen the shift towards leveraging the high performance computing capabilities of the cloud to analyse data at scale. Using this environment offers an insurer the opportunity to explore emerging technologies which help to further drive real-time analysis of data beyond the capabilities provided by on-premise systems.

Making data real

Microsoft highlighted several common use cases for machine learning and predictive analytics. These include improved risk analysis and recommendations to improve processes; improved customer retention and acquisition by gaining a better understanding of their behaviour patterns; and identifying fraudulent claims through data mining.

The opportunity to derive more sophisticated insights also brings with it the potential to monetise data in ways previously unimagined. Data provides insurers with a better mechanism to develop more agile solutions enabling them to compete dynamically with technology-driven insurtechs. Having access to integrated customer data from all their engagement points and using cloud-based analytical capabilities, is introducing innovative ways of developing more bespoke solutions and even optimising existing ones to better cater for modern customer requirements.

Analytics can now span all insurance functions to deliver a more sophisticated way of valuing data that extends through marketing, underwriting, claims management, and the customer experience. Higher demands on insurers (thanks in part to more sophisticated, digital-savvy customers) and a volatile global economy conspire to force a reinvention of traditional insurance processes. Central to this is better analysing data.

Underwriting and claims enhanced

One of the ways to reduce costs and deliver better value to the customer, is to refine the underwriting and claims management process. By linking to cloud-based environments capable of delivering digital process automation, robotic process automation, and artificial intelligence, an insurer can introduce intelligent automation to process-heavy functions to significantly improve efficiencies and deliver straight through processing.

Take for example our recent partnership with HealthCloud. The two organisations are providing insurers with a solution that intelligently automates the insurance underwriting process by securely integrating health data and medical records to assess the risk of onboarding individual customers. By integrating the data and injecting it with artificial intelligence (AI) which is built by using the human insights of underwriters, we can automate the decision-making process as far as possible.

This builds on our partnership with Astute Financial Services to deliver a fully automated intelligent claims processing solution. It uses AI modelling of insurance expert decision-makers to enable claims to be processed in real-time while providing maximum risk oversight.

Ultimately AI and machine learning combine to deliver a more intelligent view of data to the insurer. But more than that, it provides the ability to further automate processes in the organisation based on insights that were previously difficult to obtain. Viewing big data in more sophisticated ways thanks to these innovations empowers insurers with real-time capabilities they would have lacked with traditional, on-premise solutions. The new digital and inter-connected world makes data an invaluable commodity for the insurer that embraces cloud solutions to inject fresh insights into traditional approaches.

Intelligent automation in financial services

A Statista study conducted last year, revealed that 39% of the organisations surveyed indicated that they have already adopted intelligent automation (IA) at a functional level. This has likely increased significantly given the developments of recent months with the pandemic pressuring organisations to embrace a more digital approach to business. In financial services, IA has the potential to transform the way organisations operate internally and enhance customer engagement

IA is the bringing together of technologies such as digital process automation (DPA), robotic process automation (RPA), and artificial intelligence (AI) to focus on improving business processes. Whilst financial services companies have been embracing elements of automation for some time now, it is AI that is really attracting significant interest as businesses explore the potential to unlock value through improved customer service, efficiency, and risk management.

Leveraging AI

The business environment is continually changing and adapting to market requirements. But the rate at which this has been happening in recent months has increased significantly. Microsoft CEO Satya Nadella recently remarked that two years’ worth of digital transformation have taken place within two months. This has resulted in organisations having to move away from their reliance on manual processes and turn their attention to how best to leverage automation. Over the years, we have seen the adoption of RPA assist organisations to better manage high volume transaction processes. But while this automation can replace certain human-driven functions, there is little to no intelligence behind the solution.

This is where IA comes in. The ability to replicate human intelligence and, more specifically expert decision-making, allows traditional automated processes, which still require human intervention, to be fully automated – whilst retaining the insight of the best human decision-makers in the business. By adopting proper intelligent automation, financial organisations will be able to handle most transactions automatically – with only the most complex queries requiring any human intervention.

AI can provide the financial services organisation the ability to automate the decision-making process. However, by combining AI with complementary technologies, IA delivers end-to-end business process automation that incorporates human decisioning. Think of it as the virtualising and scaling of human intelligence throughout the business.

Delivering value

Furthermore, the ability of machines to work through high volumes of data at speeds not possible for human operators brings a distinct competitive advantage. When this is coupled with the ability to make the same decisions as a human expert, yet more consistently and efficiently, the opportunities for, and value to, the insurer are limitless. For example, the process an advisor would have taken to assess a claim, approve, and make payment, can now be fully automated in real-time. This frees up employees to focus on other strategic deliverables or spend more time on the most complex of claims requiring forensic review.

The recent partnership with Astute Financial Services Exchange has seen SilverBridge deliver a fully automated intelligent claims processing solution to the market. The solution incorporates industry risk scoring metrics, internal business rules, and intelligent decisioning to assist insurers with straight-through-processing (STP) of claims.

When it comes to the financial services industry, of critical importance are both compliance and regulatory adherence. All decision-making steps in a virtualised intelligent process are transparent and auditable. This is where the concept of explainable AI is vital. As example, SilverBridge uses the explainability of the AI to expose the thought processes and parameters considered in any decision making process which can be audited at any point in time. This is a critical component in a highly regulated environment such as insurance and gives executives the assurance that the right decisions are being made consistently within their operations.

Ultimately, IA delivers business value to insurers through improved operational efficiency and risk management. But perhaps more critically, it also assists the insurer to deliver a far improved customer experience to their clients and provides these companies with the means to free up key people to focus on more strategic objectives. Injecting automated decisioning at speed and scale can unlock more business value while continually delivering more innovative ways of driving customer engagement.

Digitally-driven self-service enhances insurers’ customer experience

The connected world has given rise to digitally-aware customers who have heightened expectations of their service providers. This is where delivering on a digitally-rich experience becomes a competitive advantage for insurers. An integral element of the digitalisation of traditional customer engagement practices lies in the capability of delivering digital self-service. Annalie Terblanche, head of product at SilverBridge, examines how this self-service has become an enabler in this regard while reducing the costs typically associated with a traditional approach to customer service.

The study, ‘The Value of Customer Self-Service in the Digital Age’, has identified the three most important attributes companies need for improved customer experience. These are having faster response times, delivering consistency across channels, and having knowledgeable staff. Those organisations that fail to deliver on these expectations can potentially experience bad reviews on social networks and see an increase in customer churn.

“When combining these attributes that help shape the experience with the ability to empower customers to take charge in how they use a service, insurers can create a more personal engagement while also leveraging the technology tools at their disposal more effectively. Tying all this together is data analysis. By understanding what it is that customers want, delivering it through their preferred medium, and backing that up by employees who can deliver relevant insights, an insurer can deliver enhanced digital customer experiences,” she says.

Delivering on expectations

Of course, the concept of a self-service economy is hardly a new thing. First mentioned by Jonathan Gershuny in his book of the same name in 1978, its implementation has evolved over the years as technology has become more integrated into people’s way of life.

“Some argue that the move towards self-service harms the relationships companies have with their customers. For example, it is seen to fragment society into what one article calls atomised individuals – people isolated from the brands they buy from. However, if the pandemic has illustrated anything then it is the need to have modern digital services available to customers that enable them to transact with companies using digital tools. This is not about selling to customers in isolation but instead providing them with the personalised and unique experiences that they have come to expect from modern organisations,” she adds.

For its part, SilverBridge recently introduced a policyholder portal for one of its clients to enable them to deliver effective self-service to their customer base. This sees policy holders view and update their contact details, view the benefits, cover, and premium per policy, as well as generate policy schedules. The self-service further encompasses an electronic claims submissions process and the ability to seamlessly add supporting documents.

Not only does this provide a completely transparent process with the policyholder getting information at any time, but it has empowered customers to bypass the call centre for basic queries and action it on their own time.

An economic shift

Self-service is not only a more customer-friendly tactic for insurers to implement, it can also greatly reduce costs, both from claims and resources perspectives. For instance, by using an app to record video and take photographs of an accident, the customer can significantly expedite the claims process reducing the resources required from an insurer perspective. And by having chat bots available to deal with the most frequently asked customer questions, call centre agents can focus on resolving more complex queries.

“Digitalising the experience does not have to be a difficult process. Instead, insurers can leverage the insights they have on their customers and use self-service to make it more engaging and personal for the digital world,” she concludes.

About SilverBridge

With extensive experience in designing and implementing solutions for retail and corporate long-term insurers, including pensions and employee benefits, SilverBridge is one of the largest providers of specialised technology solutions to emerging markets. Its experience also includes the development of artificial intelligence and robotic process automation solutions not only for insurance, but also the banking and telecommunications industries.

The insurance journey of tomorrow

Disruption taking place through isolated digital innovations are a thing of the past. Instead, a complete digital policyholder journey is becoming the expectation within insurance. This can be attributed to how innovation has become commonplace for a business to stay ahead of the curve.

In the past, the challenge has been to convince stakeholders of the merits of digital transformation initiatives. However, the COVID-19 pandemic and resultant lockdown have contributed to an awareness that modernisation and digitalisation strategies can no longer be ignored. These are now an imperative if the insurer hopes to meet changing customer expectations accentuated by the pandemic.

In more mature markets, the policyholder wants an online experience that is quick and user-friendly. This consists of a range of customisable options with immediate (automated) decisioning from the insurer. In developing markets, there is a need for mobile straight through processing with cover options that require minimal explanation. Of course, this might sound straightforward from the outside, but herein lies a host of challenges for the incumbent insurer. This is more so the case if they are sitting with legacy software incapable of transforming the fulfilment process to cater for the needs of the modern policyholder.

Digital now

The question now centres on the technology and process roadmap required to service this digital client. How quickly one can either ‘rip and replace’ legacy technology with more agile technology, or integrate the old with the new?

To answer this, an insurer must examine the way their legacy systems are set up:

  • Does the architecture allow for easy integration with agile technology to re-use what you have?
  • Does your current service provider (or system) allow for the digital onboarding and contract fulfilment of the policyholder?
  • Are you having conversations about intelligent process automation to take the next step in creating a seamless policyholder journey?
  • What about true straight through processing from digital marketing to onboarding, and underwriting through to claim payments? Is it seamless, or does the digital process stop for the policyholder when onerous manual tasks need to be performed in the backend?

To generate business and keep existing customers, the experience of the policyholder is paramount. Whether it is a direct channel (i.e. policyholder self-service) or through a broker network; this is what generates business. Get that right, and the rest becomes optimisations to improve existing margins.

A clear and aggressive modernisation roadmap should be considered before trying to digitalise processes. If an insurer tries to digitalise with outdated legacy technology, it is akin to running a marathon barefoot. While it is possible to do so, there is little justification for going through such a painful process.

Balancing act

Combining the vision of the digital customer journey while still managing costs in these uncertain times must be a priority. But with changing customer expectations, insurers can ill afford not to examine ways to continue delivering more value. This might extend to evaluating the effectiveness of digital channels and leveraging agents in more dynamic ways. Data integration and analysis become vital tools in this regard. Not only will this help pave the way for using the likes of AI and robotic process automation, but it will also empower agents with better insights on who customers are as well as their immediate requirements.

Technology for its own sake has little value if not used to modernise systems in ways that make business sense. This is where a people and customer-centric mindset should take priority to pave the way for the technology change to come. One of the myths that still perpetuates the market is that modernisation is simply replacing the core platform with a best-in-class option.

The level of complexity required to fully embrace digitalisation efforts requires a more nuanced approach that sees the issuing of new policies from the digital environment, while maintaining existing ones on the legacy platform. This enables the insurer to migrate on its own terms instead of trying to rip and replace invaluable data built up over many decades of doing business.

Combining forces

Digital brings with it several business benefits that range from introducing a layer of resilience to changing market forces to deliver on the shift in customer behaviour. Modernising the insurance business can greatly assist it in responding in a more agile way to external market forces.

The onus is on insurers to start building internal confidence in modernisation projects. There must be a willingness to change and to affect that change in ways that can be measured. Putting in place a business case for any digital initiative becomes imperative to helping ensure its success. Those insurers who embrace digitalisation and modernisation will be the ones building a business for the future capable of meeting evolving customer requirements.