iStock/ Olivier Le Moal
It is insurers’ claims departments that will benefit most from the progress towards automation and machine learning that is being made, says Elena Rasa, chief underwriting officer, Gruppo Zurich Italy.
The insurance industry has been slow to react to changes in technology and clearly lags behind many other industries in the extent to which it has embraced the potential technology can offer the industry—and also accepted what customers now expect.
But it is catching up, with many parts of the insurance process now experimenting with how technology can improve the way they operate. The area of claims looks set to become the biggest beneficiary in the short to medium term.
That is the view of Elena Rasa, chief underwriting officer, Italy, Gruppo Zurich Italy, who is one of the speakers at the Intelligent Automation in Insurance event being run by Intelligent Insurer in London on April 26.
Rasa acknowledges that the last few decades have seen the pervasive transformation of customer behaviour, driven by globalisation, easier and cheaper technological access, mobile diffusion and cloud computing.
In addition to this, she notes, there has been a massive development of the social networks—to which 80 percent of consumers are regularly connected—and the introduction of the internet of things. “This has finally accelerated the process; data has turned out to be a really big factor,” she says.
Insurers—along with other financial services companies—have been slow to react to these changes in society. But, she believes, that is now changing quickly.
“In this augmented reality, the financial sector has been caught by surprise and it is now slowly realising that more time cannot be wasted, especially in comparison with other consumer markets, which are well ahead,” Rasa says.
“The roadmap is clear: customers expect to contact/be contacted through a variety of mobile devices, forcing the insurance sector to enter the transformation game and to face the three major disruptors: digitisation, big data and data science.”
She adds that it is important to remember that for a long time insurers had only a limited number of points of contact with their customers, such as point of sale, renewal, and claims handling. Even though this resulted in poor quality information in many cases, insurers could still achieve good results.
“On that basis, it seems a fair assumption to state that transformation in this sector will take longer than one would expect,” she says.
However, she stresses, attempts are underway across many areas of insurance to embrace all forms of technology including intelligent automation, some of which have the potential to transform elements of the industry.
She notes that many actuaries are transforming themselves, moving from the classical modelling approach to a more modern one based on the new generation of machine learning algorithms, embedding in their DBs structured and unstructured data.
Firms that sell insurance products direct to consumers, which have been selling simple products online for 20 years, are now moving towards a more dynamic pricing approach, based not only on profitability factors but also on behavioural ones, using automated systems, Rasa says.
Natural language algorithms are starting to be used in order to classify comments coming from customers. “This can be a very useful tool to embed ‘mood’ or sentiment in the analytical part, with the final objective of improving the quality of the service offered to the final user,” she says.
Meanwhile, telematics and domotics are being used to help companies shift from a ‘pool-to-one’ to a ‘one-to-one’ approach, Rasa notes, which she describes as “a more and more tailored and sophisticated way to meet customer needs and move to a big data approach with large quantities of info”.
She also notes the potential of wearable devices to provide insurers with new info on lifestyle and wealth behaviour.
Technology is facilitating growth areas for the industry. New platforms and modelling are being developed to manage cyber risks, although they remain unexpected and unpredictable by nature and despite the facts that there is not much historical data available for analysis, and the methodology of cyber attacks keeps changing over time.
Technology is also opening up other revenue streams. “The automation performed in other industries (robots which substitute human beings in the automotive sector, for example) is forcing insurers to revolutionise their product and service offers.
“This has the consequent collateral effect of changing the approach, moving to more automated processes,” Rasa says.
She acknowledges that all these new features/devices/tools are based on the new generation of artificial intelligence (AI), but she believes that one area can benefit more than any other: claims.
“Anti-fraud systems based on intelligent ‘triage’ to assess the nature of an event is quite normal in almost the entire insurance market,” she notes.
“In addition to this, some companies have introduced an innovative use of drones for surveys, inspections and detailed documentation on the location of losses.”
This ground-breaking technology is making documentation easier and more effective and is speeding up claims handling. The drones are used mainly for complex and large losses or for places in which inspection might be very difficult such as buildings, large premises, construction machinery, cranes, planes, trains, etc.
The end game should also be more satisfied customers.
“This new ‘intelligent’ approach that companies are trying to push should be pleasantly surprising for customers which, in the era of customer-centricity, seems to be the best possible way to go,” she concludes.
Rasa will be speaking at the Intelligent Automation in Insurance conference on April 26 in London. Join us at Intelligent Automation in Insurance - London 2018. Book by Feb 28th and you could save £300.
Intelligent Automation in Insurance, London, Elena Rasa, Gruppo Zurich, Technology, Insurance, Digitisation, Big data, Artificial intelligence