How insurers can win the race to AI maturity
Artificial intelligence has been around since the 1950s, but over the past several years, the potential for commercial AI has expanded exponentially. We now live in a world where big data and the powerful computational capabilities of artificial intelligence allow it to flourish. Companies – including insurance companies – are investing in creating data lakes, Cloud-based operations optimization and enable AI for targeted analytics.
Insurance companies are seeing tangible results from current AI initiatives. Our research shows the maturity of AI Carriers’ share of cost savings from AI more than doubled between 2018 and 2021. We expect that share to triple by 2024. Moreover, insurers have been fairly satisfied with the return on their AI investments . 52% of insurers said the return on their AI initiatives exceeded their expectations, while only 3% said the return did not meet expectations.
However, insurance companies leave value on the table. In our analysis of 77 insurance companies, we found that none of them were AI Achievers, which we define as companies that had a differentiated AI strategy and had activated AI to implement that strategy. In fact, most insurance companies fall into the AI Experimenter category, representing those with AI strategies that are less mature and lack the ability to operate AI.
Insurers can move into the “achievers” category to generate greater value by leveraging AI to support wholesale reinvention of organizations. This includes using AI in enterprise-level decision-making and integrating AI into every part of the business—from improving business processes to delivering reimagined products, services, and experiences to customers.
Carriers looking to gain momentum with their AI investments can find front office opportunities and build their next phase of growth. Our study explored three major front office use cases that I will dive into in this post: customer experience, product and service development, and sales and marketing.
Customer experience intelligence and journey automation
When it comes to improving the customer experience, insurance companies are starting to make headway compared to other industries – yet they are still in the early stages of activating AI.
Many insurers have invested in developing a single view of the customer and have been able to understand what products customers have, if they have recently filed a claim or if they have received a quote for another product.
While some insurers are beginning to gain a better understanding of the interactions you have with a specific client, most insurers are struggling to connect the client’s journey across multiple channels and touchpoints. Far fewer are able to use those insights to systematically understand and address the breakpoints in that experience.
Although many insurers have invested in customer relationship management (CRM) platforms to share customer insights across the organization, few have layered in artificial intelligence to use those insights to orchestrate highly personalized customer experiences spanning marketing, sales, service, and claims. Leading CRM vendors are integrating AI capabilities into their platforms, making it easy to embed ready-made AI models into any workflow. Choosing such a technology is a huge opportunity to create omnichannel experiences and build a truly holistic view of each customer.
When it comes to automating parts of the customer journey, conversational AI remains a largely untapped opportunity for the insurance industry as a whole. Those who create self-contained conversational experiences that meet customer needs—rather than simply answering common questions or directing customers to where they can get help—generate higher levels of satisfaction with significant customer service cost savings and less dependence on a challenging job market.
Developing new products and services
Recently, Accenture found just that 88% of managers They believe their customers’ needs are changing faster than their business can keep up. Factors such as climate change and economic uncertainty force clients to adapt to conditions outside their control, moving across the region as they try to make the decisions that are best for them. Our research revealed the need for companies to shift from focusing on the customer as a consumer to developing a nuanced understanding of the customer as a multifaceted human being with complex and often contradictory desires.
This shift from customer focus to an approach we formulated “centrality of life“ Especially relevant to carriers as they develop products. AI can help carriers expand their understanding of customer behavior and move beyond cookie-cutter customer profiles with data insights. It can help them build offerings that can be customized to customers’ needs and habits as they move through their lives, recommending or seamlessly upgrading people’s products to respond to events like buying a new home or providing coverage as the climate naturally changes. Disaster risk.
There are plenty of opportunities for insurers to create new products and services that use AI to drive more value and deliver improved experiences. We are already seeing many carriers applying AI in their auto insurance products to assess driver behavior and offer pay-as-you-go policies.
With the improvement of the Internet of Things and wearable technology, carriers will be able to use artificial intelligence to gain a deeper understanding of customer behaviors, address their needs, and predict their future needs. With a deeper understanding of the customer, carriers can create products with a higher level of customization, at scale.
my colleague Jim Bramblett Explore several methods Artificial intelligence can provide another layer of protection For customers while collecting data about their risk profile and needs. One example he discusses is an IoT-connected factory floor, where AI will turn off machines as workers pass by, notifying team members of parts that need maintenance and enabling them to view potential hazards via augmented reality glasses.
Sales and marketing intelligence, recommendations and process automation
Finally, telecom companies can leverage AI to improve sales and marketing performance. During the marketing and sales funnel, telecom companies can implement artificial intelligence to display the most relevant recommendations to customers and answer their questions in the moment. For example, a UK business insurance company tabouli It uses AI at every customer touch point to offer commercial insurance products tailored to their target market of SMEs and the self-employed. They also use artificial intelligence to improve pricing and assess risk based on customer data.
When customers want to speak directly to a live person, AI can simplify The human-to-human experience It increases the likelihood that the customer will achieve the result he is looking for. Agents will benefit from more data and insights at their fingertips, meaning they can seize upselling and complement opportunities right now. Agents can rely on the AI assistant to display the most relevant information in real time and make recommendations while they are talking to a prospect.
sombo They also partnered with AI CRM company Vymo to build proactive AI-powered sales coaching technology to improve the service delivery of their team. Ping An Similar solution Provides relevant client data as well as real-time training assistance that enhances agent performance.
How can insurance companies become successful in artificial intelligence?
In our latest report, The Art of Artificial Intelligence Maturitywe identified five key areas companies need to invest in if they are to realize the full potential of AI and capture value at risk.
- Ensure that leadership champions AI as a strategic priority for the entire organization. When it comes to transformation, everyone is a stakeholder. Leaders must ensure that their teams understand the value AI brings to their daily tasks, and to overall business goals.
- Invest heavily in talent to reap more AI investments. Innovation comes from hiring a diverse group of people to solve problems in unique and meaningful ways.
- Manufacture AI tools and teams to create the “AI core”. To scale AI, carriers need to create repeatable processes that create a strong foundation for increasing innovation over time.
- Use AI responsibly from the start. AI ethics and governance It should be at the center of every AI initiative as carriers expand. Today, only 35% of consumers trust how organizations implement AI. To retain customers, carriers must demonstrate transparency and reduce bias.
- Plan for long and short term investments. There is no finish line when it comes to AI strategy and innovation. Customer needs will continue to evolve, as will AI capabilities. Those who plan ahead will stay ahead as the need to adapt increases.
The potential of AI in insurance has yet to be fully realized, but carriers that take the initiative to build a robust AI program today will see a strong return on those investments. I would like to discuss how you can make better use of AI in your front office, so please feel free to do so Get in touch with me.
Claim Transformation and Underwriting with AI: AI has emerged as the differentiator in the insurance industry when applied alongside humans.
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