How Insurance Companies Can Leverage New Opportunities In the Next Normal 2021
As COVID-19 continues to disrupt the way we work and live, businesses need wake up to the ongoing changes and reinvent themselves
Signs of dramatic change are now being observed worldwide. Some of it is slow and is creeping upon us while some of it is accelerated, compelling us to be extremely agile. As famously quoted by C.S. Lewis, "Isn't it funny how day by day nothing changes but when you look back everything is different." As COVID-19 continues to disrupt the way we work and live, businesses need wake up to the ongoing changes and reinvent themselves. The idea is not only to survive but to emerge beyond this period of uncertainty stronger and more resilient. For insurance companies, a key catalyst and enabler of this change is going to be technology and digital solutions.
Technology: The only armour you need in the "next' normal
Technology enabling better risk assessment and improving the claims process: Artificial intelligence (AI) can enable insurance companies to identify, assess, and underwrite existing and emerging risks in a more efficient and accurate manner. With AI and predictive analytics, insurers can access and analyse data faster, thereby improving the risk assessment and the claims turnaround cycles. A report from PwC mentioned that while AI's initial impact will primarily relate to improving efficiencies and automating existing customer-facing underwriting and claims processes, over time, its impact is likely to be more profound.
Further, insurance companies can use data from Internet-of-Things (IoT) such as wearable technologies to better understand the insurance client and evaluate the inherent risk in the client. IoT can supply insurance companies with specific and first-hand data that can improve the accuracy of risk assessment, empower the insurance company to better price the policy, and allow the customer to take advantage of customised pricing. Machine Learning (ML), a subset of AI, can go a step further in that it can not only improve the claims process but also automate it. By converting files and information into digital assets, making it accessible via the cloud, and leveraging pre-programmed algorithms for analytics, ML can automate the entire claims process. Insurers are also increasingly utilising unmanned drones for uses across several stages of the insurance lifecycle – from data collection for risk assessment before issuing a policy to assessing damage at the time of claims processing. The use of such technologies will be beneficial both for the insurance company as well as the insurance customer.
Technology enabling customisation: In today's time and age, customers are increasingly looking for customised solutions that are being enabled by digital solutions. Hence, customisation in terms of service and product offering is likely to become one of the key expectations of customers in 2021 and beyond. Technology can play an integral role here. First, it can help insurance companies embed themselves deeper into customers' lives to better understand their unique needs. Second, insurance companies can leverage technologies to create customised products and solutions in a cost efficient and seamless manner. In that respect, consented access to social media data is likely to play an important role in insurance industry. Evolving beyond marketing strategies and advertisements, data gleaned from the social media can also help insurance companies improve their risk assessment, bolster fraud detection capabilities, and enable new and more customised experiences for the insurance customer. Further, by utilising AI and ML capabilities, insurance companies can use chatbots to seamlessly chat with customers on demand. Bots are available 24/7 and can walk a customer through the basic policy application or claim process and also answer important and frequently asked questions. This will go a long way in improving customer experience and freeing up resources for more complex requirements.
Technology empowering advisors: In India, a vast majority of insurance policies are sold by the trusted old insurance advisor. Thus, in order to truly accelerate insurance penetration in India, it is the advisors who must be empowered with the relevant digital. In 2021, the value of digital tools in the hands of the advisor will only increase further given the new paradigms with respect to social distancing and contact risk. From that perspective, technology can help advisors interact more efficiently with their clients, digitally fill-out and process the insurance applications, and proactively address queries. Further, Augmented Reality (AR)/Virtual Reality (VR) simulations can be used to conduct training activities and meetings from a safe distance.
In every adversity lies an opportunity. Times like the current one create major market shifts that can engender unique challenges and opportunities. For insurance companies, technology is going to be the bulwark for surviving and thriving in 2021 and beyond. The time to holistically embrace technological solutions is now!