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5 AI Trends Reshaping the Insurance Sector in 2019

NewVantage Partners Executive Survey 2019 report states- 92% of the C-Level Executives are increasing their pace of investment in big data and AI. Artificial Intelligence brings forth revolutionary benefits to enterprises like personalization, automating customer interactions, real-time assistance, and much more.

Here are 5 flourishing artificial intelligence trends in insurance.

Infographic for 5 AI trends in Insurance

#1 Data from Smart Devices

Smart devices like fitness bands, home assistants, smartwatches, etc. are meteorically becoming integral to our lifestyle. Smart clothing and medical devices are soon going to join the bandwagon.

The insurance sector can dive into the data generated by these smart devices to better understand their user preferences. This data can further help insurers create new and more personalized product categories. 

#2 UAVs for Extreme Surveillance

AI-driven unmanned aerial vehicles (UAV), also known as drones can examine sites, which are otherwise extreme for humans to visit. Using such technologies for geological surveys can make the underwriting process more accurate. Also, deploying drones and robots can revamp insurance risk management strategies. 

“It is estimated that by 2025 the number of autonomous vehicles will increase by 25%”

Source: doi.gov

#3 Channelized Data Sharing

Everyone needs data. Every industry is thriving to provide personalized products and services to its customers. Thus, one can expect private and public entities collaborating to create common platforms for data sharing. 

The data-sharing platforms are GDPR-compliant and adhere to a common cybersecurity framework. Tech giants like Google, Amazon, and Apple have already sailed into this venture. They are able to bond with the lifestyle of users through cloud connectivity and smart devices and wearables. Technology can track instances of customers’ life. Guided data sharing can enable insurance companies to provide real-time assistance to their customers.

#4 Evolution of Cognitive Technologies

Cognition is an important aspect of Artificial Intelligence. Cognitive technologies in AI mimics how the human brain works. The recent improvements in technology can provide a better framework for processing humongous data, specifically gained from active insurance products tied to definite individuals.

With cognitive technologies, carriers can constantly learn and adapt to the world around consumers. This can enable insurance companies to not bring new product categories and engagement techniques but also respond to changing underlying risks in real-time.

#5 Blockchains or Distributed Ledgers

Breaking the traditional barriers of silos and centralization, 2019 is leaping towards the combination of the best of AI and blockchain for businesses.

For example, Smart contracts can automatically determine whether an asset can be transferred to a nominee or back to the source, or a combination of both. Blockchain can also simplify claims management, reinsurance, and underwriting.

Here’s more about how distributed ledgers can accelerate insurance workflows.

Well, the benefits of blockchain are not limited to large-scale insurance companies. Any InsurTech or FinTech firm or even e-commerce marketplaces can use blockchain to distribute micro insurances. The following infographic illustrates the projects successfully harnessing AI and blockchain.

Source: LiveTiles

We help startups and enterprises, build & scale AI-driven products and solutions for last-mile environments. Reach out to us on hello@mantralabsglobal.com to learn more.

Contributing Authors: Nidhi Agrawal (Content Writer @Mantra Labs)

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Retention playbook for Insurance firms in the backdrop of financial crises

4 minutes read

Belonging to one of the oldest industries in the world, Insurance companies have weathered multiple calamities over the years and have proven themselves to be resilient entities that can truly stand the test of time. Today, however, the industry faces some of its toughest trials yet. Technology has fundamentally changed what it means to be an insurer and the cumulative effects of the pandemic coupled with a weak global economic output have impacted the industry in ways both good and bad.

Chart, line chart

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Source: Deloitte Services LP Economic Analysis

For instance, the U.S market recorded a sharp dip in GDP in the wake of the pandemic and it was expected that the economy would bounce back bringing with it a resurgent demand for all products (including insurance) across the board. It must be noted that the outlook toward insurance products changed as a result of the pandemic. Life insurance products were no longer an afterthought, although profitability in this segment declined over the years. Property-and-Casualty (P&C) insurance, especially motor insurance, continued to be a strong driver, while health insurance proved to be the fastest-growing segment with robust demand from different geographies

Simultaneously, the insurance industry finds itself on the cusp of an industry-wide shift as technology is starting to play a greater role in core operations. In particular, technologies such as AI, AR, and VR are being deployed extensively to retain customers amidst this technological and economic upheaval.

Double down on digital

For insurance firms, IT budgets were almost exclusively dedicated to maintaining legacy systems, but with the rise of InsurTech, it is imperative that firms start dedicating more of their budgets towards developing advanced capabilities such as predictive analytics, AI-driven offerings, etc. Insurance has long been an industry that makes extensive use of complex statistical and mathematical models to guide pricing and product development strategies. By incorporating the latest technological advances with the rich data they have accumulated over the years, insurance firms are poised to emerge stronger and more competitive than ever.

Using AI to curate a bespoke customer experience

Insurance has always been a low-margin affair and success in the business is primarily a function of selling the right products to the right people and reducing churn as much as possible. This is particularly important as customer retention is normally conceived as an afterthought in most industries, as evidenced in the following chart.

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        Source: econconusltancy.com

AI-powered tools (even with narrow capabilities) can do wonders for the insurance industry at large. When architected in the right manner, they can be used to automate a bulk of the standardized and automated processes that insurance companies have. AI can be used to automate and accelerate claims, assess homeowner policies via drones, and facilitate richer customer experiences through sophisticated chatbots. Such advances have a domino effect of increasing CSAT scores, boosting retention rates, reducing CACs, and ultimately improving profitability by as much as 95%.

Crafting immersive products through AR/VR

Customer retention is largely a function of how good a product is, and how effective it is in solving the customers’ pain points. In the face of increasing commodification, insurance companies that go the extra mile to make the buying process more immersive and engaging can gain a definite edge over competitors.

Globally, companies are flocking to implement AR/VR into their customer engagement strategies as it allows them to better several aspects of the customer journey in one fell swoop. Relationship building, product visualization, and highly personalized products are some of the benefits that AR/VR confers to its wielders.  

By honoring the customer sentiments of today and applying a slick AR/VR-powered veneer over its existing product layer, insurance companies can cater to a younger audience (Gen Z) by educating them about insurance products and tailoring digital delivery experiences. This could pay off in the long run by building a large customer base that could be retained and served for a much longer period.

The way forward

The Insurance industry is undergoing a shift of tectonic proportions as an older generation makes way for a new and younger one that has little to no perceptions about the industry. By investing in next-generation technologies such as AR/VR, firms can build new products to capture this new market and catapult themselves to leadership positions simply by way of keeping up with the times.

We have already seen how AR is a potential game-changer for the insurance industry. It is only a matter of time before it becomes commonplace.

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