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Artificial intelligence has been around since the 1950s, but the commercial potential of AI has expanded dramatically over the past several years. We now live in a world where big data and powerful computational capabilities allow AI to flourish. Companies—including insurance carriers—are investing in setting up data lakes, optimizing for cloud-based operations, and activating AI for targeted analytics.
Insurers are seeing tangible results from their current AI initiatives. Our AI Maturity Research Reveals Carriers’ share of cost savings generated through AI to more than double between 2018 and 2021. We estimate that share to triple by 2024. Furthermore, insurers are quite satisfied with the return on their AI investment. Fifty-two percent of insurers said that the returns on their AI initiatives exceeded their expectations, while only 3% said that the returns did not meet expectations.
However, insurers are leaving 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 have a distinct AI strategy and have operationalized AI to execute that strategy . In fact, most insurance companies are in the AI Experimenter category, which represents those with the least mature AI strategies and lack of ability to operationalize AI.
Insurers can move into the achiever category to drive greater value by leveraging AI to power end-to-end enterprise innovation. This includes employing AI in organization-wide decision making and integrating AI into every part of business – from business process optimization to delivering new products, services and experiences to customers.
Carriers looking to gain momentum with their AI investments can find opportunities in the front office and build their next phase of growth. Our study discovered three key front office use cases, which I’ll 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 customer experience optimization, insurers are starting to make progress compared to other industries—yet they are still in the early stages of AI activation.
Many insurers have invested in developing a single view of the customer and are able to understand which products customers have, if they have recently made a claim or received a quote for another product Or not.
While some insurers are starting to gain a better understanding of the interactions that occur with a given customer, most insurers struggle to connect the multiple channels and touchpoints across the customer journey. Very few are able to understand the breakpoints in that experience and use those insights to systematically address them.
While many insurers have invested in customer relationship management (CRM) platforms to share customer insights across the enterprise, few have used those insights to orchestrate highly personalized customer experiences that span marketing, sales, service and claims. Layered in AI to use. Major CRM vendors are integrating AI capabilities into their platforms, making it easy to embed out-of-the-box AI models into any workflow. Choosing a technology like this is a prime opportunity to create an omnichannel experience and a truly holistic view of each customer.
Conversational AI remains a largely untapped opportunity for the insurance industry as a whole when it comes to automating parts of the customer journey. Those who are creating self-contained conversational experiences that meet customer needs – not just answering frequently asked questions or telling customers where they can get help – Valued customer service are generating higher levels of satisfaction with cost savings and less reliance on a challenging labor market. ,
New Product and Service Development
Recently Accenture found that 88% officers Their customers’ needs seem to be changing faster than their businesses. Factors such as climate change and economic uncertainty are forcing customers to adapt to circumstances that are beyond their control, moving through the territory as they try to make decisions that are best for them. Our research revealed the need for companies to shift from focusing on the customer as a customer to developing a nuanced understanding of the customer as a multifaceted human being with complex and often conflicting desires.
This change is crafted by us from a customer-centric approach ,life-centeredness, Especially relevant to carriers as they develop products. AI can help carriers broaden their understanding of customer behavior and go beyond cookie-cutter customer profiles with data insights. This can help them create offerings that can be tailored to customers’ needs and habits as they move through their lives, responding to events such as purchasing a new home or providing coverage in the form of climate change. freely recommend or promote the products of individuals to give. disaster risk.
Insurers have plenty of opportunities to create new products and services that use AI to drive greater value and deliver enhanced experiences. We are already seeing many carriers implementing AI into their auto insurance products to assess driver behavior and offer pay-as-you-drive policies.
As IoT and wearable technology improves, carriers will be able to use AI to gain an even deeper understanding of customer behaviors, meet their needs, and predict their needs in the future. With a deep understanding of the customer, carriers can build products at scale with greater levels of personalization.
my colleague Jim Bramblett found some ways AI can provide another layer of security While collecting data for customers about their risk profiles and needs. One of the examples he discusses is an IoT-connected factory floor, where AI stops and starts machines as workers pass by, notifying team members about parts that need maintenance. required and enables them to see potential threats through the AR glasses.
Sales and marketing intelligence, recommendations and process automation
Finally, carriers can leverage AI to enhance their sales and marketing performance. Throughout the marketing and sales funnel, carriers can apply AI to surface the most relevant recommendations for customers and address their questions quickly. For example, UK business insurance company Tapoli Uses AI at each customer contact point to offer customized commercial line insurance products to its target market of micro-SMEs and freelancers. They also employ AI to optimize pricing and risk assessment based on customer data.
AI can come in handy when customers want to speak directly to a live person human-to-human experience and increase the likelihood that the client gets the result he or she is looking for. Agents will benefit from having more data and insights at their fingertips, meaning they can seize upsell and cross-sell opportunities in the moment. Agents can rely on the AI assistant to surface the most relevant information in real time and make recommendations when talking to a prospect.
sompo It has also partnered with AI CRM firm Waymo to create AI-enabled proactive sales coaching technology to improve the service provided by its teams. Ping An has evolved uniform solution Which provides relevant customer data as well as real-time coaching assistance that enhances agent performance.
How Insurers Can Become AI Achievers
In our recent report, The Art of AI MaturityWe have identified five key areas in which companies need to invest if they want to realize the full potential of AI and seize the value at stake.
- Ensure leadership champions AI as a strategic priority for the entire organization. When it comes to change, everyone is a stakeholder. Leaders must ensure that their teams understand the value of AI to their daily operations and broader business goals.
- Invest heavily in talent to get the most from your AI investment. Innovation comes from employing a diverse group of people to solve problems in unique and meaningful ways.
- Industrialize AI tools and teams to form the “AI Core”. To scale AI, carriers need to create repeatable processes that build a strong foundation for incremental innovation over time.
- Use AI responsibly from the start. AI ethics and governance As a carrier scale needs to be at the heart of every AI initiative. Today, only 35% of consumers trust how AI is being implemented by organizations. To retain customers, carriers must demonstrate transparency and reduce bias.
- Plan 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 be ahead as the need to adapt increases.
The potential of AI in insurance is far from being fully realized, but carriers that take the initiative to build a strong AI program today will see strong returns from those investments. I’d love to discuss how you can better leverage AI in your front office, so please don’t hesitate to contact me.
Transforming claims and underwriting with AI: AI has emerged as a key differentiator in the insurance industry when implemented in conjunction with humans.
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