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10 Most Impactful AI-based Insurance Innovations of 2019

5 minutes, 5 seconds read

The year 2019 has been a benchmark in insurance innovations that brought in new value propositions to the industry. What’s more remarkable is — both traditional Insurers and Insurtechs are striving to offer simple, convenient, and value-added customer-centric products coupled with technology initiatives. Here are 10 noteworthy insurance innovations that shaped the industry this year.

  1. Augmented Intelligence
  2. AI-based Smart Automation
  3. Digital Insurance Broker
  4. Services Beyond Insurance
  5. Blockchain in Reinsurance
  6. Unconventional Partnerships
  7. Understanding Customers and Delivering Tailored Products
  8. Insurance on Demand Services
  9. Risk Intelligence
  10. Customer Education

10 Most Impactful Insurance Innovations of 2019

According to a recent EFMA-Accenture report, the insurance industry has witnessed growth in digital sales & services, Artificial Intelligence trends — especially machine learning and natural language processing (nlp), big data and analytics, cloud, intelligent automation, and blockchain.

However, insurance players are not just adding convenience through technology but also understanding the ‘actual’ customer needs and developing the products accordingly. Let’s discuss the impactful insurance innovations with their use cases in detail.

#1 Augmented Intelligence

While most insurers are leveraging AI to understand customers and their requirements; another idea that hits the list is to complement the knowledge of insurance employees during sales pitches and customer services. 

For example, Zelros is Augmenting intelligence of sales and customer representatives through real-time best product recommendations, advisory, and pricing based on studying the customer profile.

Zelros - augmented intelligence - insurance innovations

Similarly, Nippon Life Insurance Company has introduced an AI-powered TASKALL tablet for its sales representatives. This tablet identifies suitable prospects from the set of entire salesforce activities, thus enhancing the sales and customer representatives’ services. 

#2 AI-based Smart Automation

Smart automation corresponds to deploying intelligent technologies to gain massive operational efficiency and at the same time create value for the end customer. 

For example, South Korean Kyobo Life Insurance Co. Ltd. has developed an AI system BARO (Best Analysis & Rapid Outcome) to automate underwriting. The system uses NLP to allow sales and customer interactions in natural language.

In the same way, Religare incorporated AI-based chatbot in their workflow. Through this bot, the company has automated a number of operations like customer query resolution, customer engagement, and lead and ticket management.

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Join our Webinar — AI for Data-driven Insurers: Challenges, Opportunities & the Way Forward hosted by our CEO, Parag Sharma as he addresses Insurance business leaders and decision-makers on April 14, 2020.

#3 The Digital Insurance Broker

In 2018, in the US alone, nearly 1.2 million people worked for insurance agencies, brokers, and insurance-related enterprises. This indicates the prominence of the brokerage in insurance. Brokers might not be directly involved in product development, risk evaluation, etc.; but they play a pivotal role in insurance distribution. 

For example, Gramcover, an Indian composite insurance broking firm is leveraging mobile technologies to minimize the inefficiencies and transaction costs in distributing micro-policies.

Also read – The case for a digital brokerage

#4 Beyond Insurance

The year 2019 also witnessed the entry of technology giants like Alibaba entering the insurance space, and people welcoming them made the competition even more fierce. The World Insurtech Report 2019 states that nearly 30% of customers are interested in buying at least one insurance product from BigTech firms like Google, Apple, Facebook, Amazon, and Alibaba. 

Insurers have thus realized to embrace the ecosystem-based digital economy to deliver richer customer experiences. AG Insurance’s Phil at Home is an example of ‘beyond’ insurance services to support customers in their day to day life. The app provides house maintenance services like plumbing, electricity, etc. along with medication reminders, food delivery, etc. to its elderly customers.

Also read – The Belgian Insurance Landscape

#5 Blockchain in Reinsurance

Blockchain or distributed ledger technology (DLT) brings transparency to a range of insurance processes along with the secure sharing of information. The innovative use of blockchain in insurance is to reduce redundant efforts. 

For example, the US-based Aon Benfield along with partners have developed a blockchain-powered reinsurance placement solution to bring brokers and reinsurers on a collaborative platform.

Similarly, the Hong Kong Federation of Insurers in collaboration with CryptoBLK developed MIDAS (Motor Insurance DLT-based Authentication System) to authenticate motor insurance policy documents across the network in real-time.

#6 Unconventional Partnerships

Insurers’ partnerships with Insurtechs, Fintechs, and external players are presenting an opportunity to explore new customer base, test different business models, and get access to new technology frontiers. 

For example, AXA partnered with ContGuard, which provides real-time cargo tracking services. Their product — Connected Cargo Solution gives customers 24/7 monitoring and data to AXA’s risk engineers to develop loss prevention plans. This also helps underwriters to quote the price with increased accuracy.

#7 Understanding Customers and Delivering Tailored Products

Addressing the customers’ demand for personalized services, Insurers have started applying AI to understand their sentiments and requirements. They have realized that real-time digital services unlock values for both carriers and customers.

For example, the UK-based Bought By Many helps people find insurance for uncommon assets like pets, shoes, gadgets, etc. The company also negotiates with insurers for the best deals.

#8 On-demand Insurance models

The World Insurtech report 2019 reveals that nearly 41% of customers are ready to consider usage-based insurance and 37% want to explore on-demand insurance coverage. While usage-based insurance models provide as-you-go premium coverage based on customer’s potential for risky behavior; on-demand insurance allows customers to get cost-effective and convenient coverage depending on their needs.

For example, The Dinghy is an app-based on-demand freelancer insurer. It is also the world’s first on-demand professional indemnity insurance covering public liability, business equipment, legal expenses, and cyber liability.

#9 Risk Intelligence

Insurers are deploying machine learning models for risk assessment and mitigation. It not only makes the underwriting more accurate but also boosts profits by diminishing risks.

For example, ZestFinance uses automated machine learning tools to correlate current and traditional data. It helps to effectively gauge risks and outreach potential new customers.

#10 Customer Education

Pricing still presents a bigger competitive advantage than many other insurance features. Accenture’s 2019 Global Financial Services Consumer Study states – more than 75% of customers can share their personal information for better prices. 

Therefore, educating customers about potential risks isn’t sufficient. Coupling this information with available products’ prices and benefits is a must. For example, Jerry, a California-based personal insurance marketplace checks if the user is paying the best price for the insurance services. Based on an initial questionnaire, their AI-powered tools takes roughly 45 seconds to compare quotes from leading insurers and suggest optimum rate to the user.

Also read “Top 5 smartest AI-powered machines on earth.”

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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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