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5 Insurance Front-Office Processes You Can Improve with AI

6 minutes, 5 seconds read

Amidst the growing footprint of Insurtech around the world, Insurance service models continue to evolve for both front and back-office processes. Currently, InsurTechs are using AI in three main areas: Customer Experience (58%), Product Innovation (43%), and Process Improvement (19%) — according to a McKinsey report. An organization’s ‘Front Office’ strategy will need to embody intelligent sales force automation, call-centre management, help-desk applications, product configuration and risk assessment tools. Insurance Carriers are restructuring these operations with an outward focus — aimed at improving interactions with their customers. 

While the Insurance back-office is focussed on streamlining in-house operations, the front office is responsible for driving customer experience, engagement and behaviour. However, most front-office operations deal with repetitive customer-facing jobs. Using Artificial Intelligence-based technologies such as RPA, tasks that require human mediation can now be handed over to automation technologies that imitate human interactions. Gartner estimates 20% of RPA will be cloud-based by 2022.

The real benefit of undergoing automation transformation is that both the front & back office can now be contextually linked in a smart manner — avoiding ‘working in isolation’ for extended periods. Customer-facing agents and reps can access information across the back-end more reliably and faster than before. Automating even routine tasks such as updating customer information, performing security checks, fetching product details or updating complaint forms — can reduce resolution times and the potential for manual errors.

This allows the front-office staff to focus on the most pressing matter — the relationship with the customer.

Customer servicing can now take place at incredible scale and complexity using chat, mobile and voice self-service tools. For example, speech recognition can capture what type of service to offer the customer (eg: update contact information, access policy details etc). These tools can also detect ‘anger’ or ‘frustration’ from the tone of voice and the information is passed to front-line reps who can quickly resolve an issue. As a result, remote diagnostics and self-service tools will see enhanced adoption over the coming years. The market for AI-enabled technologies in the claims process alone will be worth $72B by 2020.

5 key front-office operations that can be improved with AI

  1. Underwriting
    The most central function within the insurance value chain is to price risk. Using AI, the insurance underwriting process is now empowered with real-time insights derived from models analysis tons of customer-centric data.

    Using historical data, machine learning models can be trained to understand ‘known risks’ based on experience. For ‘unknown risks’, IoT sensors play a crucial role — by delivering a real-time picture of an ongoing operation. This allows for a second model to infer risk based on current data and the entire historical record of that specific process.

    Armed with in-depth knowledge about risk, insurers are moving from traditional risk pricing to a more proactive risk mitigation role. Through this new approach, carriers can set up real-time risk alerts, predict fraud and more accurately forecast ‘claims occurrence’ across the customer life cycle.

  2. Policy Administration
    A policy administration system is a backbone that manages all the policies within an insurance company. From the first point of interaction to fetching data from the back-office — most, if not all core operations run through this system. However, most insurance organizations still rely on legacy systems that require tremendous workaround using manual efforts.

    According to a study by Celent, nearly 45% of Insurance CIOs identified disconnected and duplicative legacy systems as a key inhibitor to digital transformation.

    Today’s challenging market dynamics and competitive pricing pressures are changing this approach. There are several areas worth investing in for carriers such as image & voice recognition to capture and authenticate customer information at the initial contact stage to intelligent entity extraction tools for understanding even handwritten text from a physical document.

    Automation enhancements help drive policyholder retention by improving connectivity to the back-end and delivering the most optimal outcomes for front-office workflows.

  3. Claims Management

    Claims are the most widely scrutinized function within the insurance value chain. Most claims servicing is performed by human agents over the phone. With speech recognition, these conversations can be automatically transcribed/ translated in real-time. This frees up more agent time to handle greater issues while leaving automation enabled self-service to handle the most basic customer queries.

    Claims assessment or loss estimation itself can be performed remotely using image recognition tools linked to algorithms that can calculate the payout for the policyholder.

    Without the need for human intervention, straight-through processing can be dramatically improved by reducing processing time — allowing human agents to react faster to policyholders demands.

    Also, read – How AI can settle claims in 5 minutes!

  4. Marketing & Sales Distribution
    According to Salesforce, only 36% of the average salespersons’ week is spent selling. Human sales reps typically spend a large portion of their time nurturing unqualified leads. With sales funnel maximizers, like LCA, reps can get quick access to leads that have been scored, prioritised and allocated for the right agent to optimize conversions.

    Distribution and sales chains are moving to a completely digital and affinity-based ecosystem. Chatbots and virtual agents can, therefore, play a critical role in increasing cross-sell and up-sell opportunities. These AI-enabled tools are fitted with Natural Language Processing (NLP) capabilities to contextually interpret the interaction with the customer.

    AI also leverages predictive analytics to produce behavioural insights when pitching the customer — allowing the agent to ask the right questions, address unmet needs and resolve anticipated near-term challenges.

  5. Product Personalization
    Using Machine Learning algorithms to precisely price risk, allows Carriers to understand the complexities involved in new product development — especially measuring the ‘unknown risks’ involved in creating new product lines.

    Data (both historical and IoT derived) coupled with predictive analytics can offer more personalised guidance to insurance buying. InsurTechs are poising themselves strategically in this area, ahead of the large carriers, to attract a new and younger customer base. Companies like MetroMile, Trov and Lemonade have been able to create unique offerings with AI-derived insights fine-tuned to the individual, while also charging much lower premiums than the market.

    New customers are able to buy convenient, sachet-type, even pay-as-you-use modelled insurance products for protecting their assets (mobile, laptop, home appliances, short travel, vacations etc). This has brought about an appetite for on-demand insurance where insurance can be bought, queries can be resolved and claims can be processed, all within a few minutes.

Other Customer-Facing Areas improved by AI

1. Proactive Front-Office Processes 
2. Precise Risk Mitigation/Active loss prevention
3. Chatbots and Robo-advisors 
4. Real-time Underwriting 
5. Accurate Claims Processing 
6. Direct Marketing & Cu0stomer Retention
 7. Bespoke Insurance Advice
 8. Understanding User’s Emotions 

Forrester predicts the impact of intelligent automation — through evidence in ‘the service desk’. They claim: automation will eliminate 20% of all service desk interactions, by the end of 2019. Enabling human workers with digital assistants in the insurance front-office has scope for very high disruption. Human agents are prone to making repeat errors that automation equipped with AI can fix easily — especially in routine and repetitive tasks.

Carriers, now have the opportunity to boost their market position by improving agent productivity, reducing operational inefficiencies like reprocessing, producing errorless transactions for customers and thereby creating an uninterrupted service chain.
Mantra Labs solves the most challenging front & back-office operations plaguing the Insurance value chain. To know more about our work in this space, reach out to us on hello@mantralabsglobal.com.

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The ‘Cyber Attacks’ Winter is Coming — straight for small firms in India Inc.

5 minutes read

Cyber intrusions and attacks have increased exponentially over the last decade approximately, exposing sensitive information pertaining to people and businesses, thus disrupting critical operations, and imposing huge liabilities on the economy. 

Cybersecurity is a responsibility that employees and leaders across functions must shoulder simply because it is the gospel truth – you cannot protect what you cannot see. As organizations have shifted to the work-from-home model due to the outbreak of the COVID-19 pandemic, it’s increasingly important to keep your company’s data secure. 

While the pandemic has led to near or complete digitalization of operations amongst financial institutions, it’s also increased the potential for cyberattacks that lead to adverse financial, reputational, and/or regulatory implications for organizations. 

According to Accenture, cybercrime is said to cost businesses $5.2 trillion worldwide within five years. “With 43% of online attacks now aimed at small businesses, a favorite target of high-tech villains, yet only 14% prepared to defend themselves, owners increasingly need to start making high-tech security a top priority,” the report continues.

A recent McAfee study shows global cybercrime costs crossed US$1 trillion dollars in 2020, up almost 50% from 2018.

India too saw an exponential rise in cybersecurity incidents amid the coronavirus pandemic. Information tracked by the Indian Computer Emergency Response Team (CERT-In) showed that cybersecurity attacks saw a four-fold jump in 2018, and recorded an 89 percent growth in 2019.

The government has set up a Cyber Crisis Management Plan for countering cyber-attacks effectively, while also operating the Cyber Swachhta Kendra (Botnet Cleaning and Malware Analysis Centre).

Banks and Financial Institutions (FIs) are some of the highest targeted market sectors. An analysis by FitchRatings in collaboration with SecurityScorecard reveals that banks with higher credit ratings exhibited better cybersecurity scores than banks with lower credit ratings. 

Bharti Airtel’s chief executive officer for India, Gopal Vittal, in a letter to the telco’s 307.9 million subscribers, detailed out how Airtel is carrying out home delivery of SIM cards and cautioned subscribers from falling prey to cyber frauds. He cautioned them against the rapid rise in cyber frauds, highly likely via digital payments. “There has been a massive increase in cyber frauds. And as usual, fraudsters are always finding new ways to trick you,” he added in the letter. 

Barcelona-based Glovo, valued at over $1 billion, that delivers everything from food to household supplies to some 10 million users across 20 countries, came under attack recently when the “hacker gained access to a system on April 29 via an old administrator platform but was ejected as soon as the intrusion was detected”, according to the company.

The attack came less than a month after Glovo raised 450 million euros ($541 million) in funding. 

According to Kaspersky’s telemetry, close on the heels of coronavirus-led pandemic and subsequent lockdown in March 2020, saw a total number of meticulously planned attacks against remote desktop protocol (RDP) jumped from 93.1 million worldwide in February 2020 to 277.4 million 2020 in March — a whopping 197 percent increase. In India, the numbers went from 1.3 million in February 2020 to 3.3 million in March 2020. In July 2020, India recorded its highest number of cyberattacks at 4.5 million.

The recent data breach at the payment firm Mobikwik, affected 3.5 million users, exposing Know Your Customer (KYC) documents such as addresses, phone numbers, Aadhaar card details, PAN card numbers, and so on. The company, however, still maintains that there was no such data breach. It was only after the Reserve Bank of India’s intervention that Mobikwik got a forensic audit conducted immediately by a CERT-IN empaneled auditor and submitted the report. 

Security experts have observed a 500% rise in the number of cyber attacks and security breaches and a 3 to 4 times rise in the number of phishing attacks from March until June 2020.

These attacks, however, are not just pertaining to the BFSI sector, but also the healthcare sector, and the education sector.

Image Source: BusinessStandard.com

What motivates hackers to target SMBs? 

Hackers essentially target SMBs because it’s a source of easy money. From inadequate cyber defenses to lower budgets and/or resources, smaller businesses often lack strong security policies, cybersecurity education programs, and more, making them soft targets. 

SMBs can also be a ‘gateway’ to larger organizations. As many SMBs are usually connected electronically to the IT systems of larger partner organizations, it becomes an inroad to the bigger organizations and their data. 

How can companies shield themselves from a potential cyberattack: 

As a response to the rising number of attacks in cyberspace, the Home Ministry of India issued an advisory with suggestions on the prevention of cyber thefts, especially for the large number of people working from home. Organizations and key decision-makers in a company can also create an effective cybersecurity strategy that’s flexible for adaptation in a changing climate too. Here are a few use cases: 

  • CERT-In conducted ‘Black Swan – Cyber Security Breach Tabletop Exercise’, in order to deal with cyber crisis and incidents emerging amid the COVID-19 pandemic, resulting from lowered security controls. 
  • To counter fraudulent behavior in the finance sector, the government is also considering setting up a Computer Emergency Response Team for the Financial Sector or CERT-Fin.
  • Several tech companies have come forth to address cybersecurity threats by building secure systems and software to mitigate issues like these in the foreseeable future. For example, IBM Security has collaborated with HCL Technologies to streamline threat management for clients through a modernized security operation center (SOC) platform called HCL’s Cybersecurity Fusion Centres. 

Some of the ways through which companies can mitigate potential risks include: 

  • Informing users of hacker tactics and possible attacks
  • Establish security rules, create policies, and an incident response plan to cover the entire gamut of their operations
  • Basic security measures such as regularly updating applications and systems
  • Following a two-factor authentication method for accounts and more

While these measures are some of the ways to be on top of your game in the cybersecurity space, they will also help in sound threat detection while helping gain better insights into attacks and prioritizing security alerts so that India is better prepared for an oncoming attack and battling any unforeseen circumstance that might result in huge loss of data, resources and more. 

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