10%

Try : Insurtech, Application Development

Edtech(5)

Events(34)

Interviews(10)

Life@mantra(11)

Logistics(1)

Strategy(14)

Testing(8)

Android(46)

Backend(29)

Dev Ops(3)

Enterprise Solution(22)

Frontend(28)

iOS(41)

Javascript(13)

Augmented Reality(17)

Customer Journey(12)

Design(13)

User Experience(34)

AI in Insurance(31)

Insurtech(59)

Product Innovation(37)

Solutions(15)

E-health(3)

HealthTech(8)

mHealth(3)

Telehealth Care(1)

Telemedicine(1)

Artificial Intelligence(109)

Bitcoin(7)

Blockchain(18)

Cognitive Computing(7)

Computer Vision(8)

Data Science(14)

FinTech(44)

Intelligent Automation(26)

Machine Learning(46)

Natural Language Processing(13)

InsurTalks Podcast with Horacio Sanchez-Granel: Can Insurers respond swiftly to customer needs during a Pandemic?

7 minutes, 50 seconds read

According to the International Monetary Fund (IMF), the global economy is expected to shrink by over 3 percent in 2020 – the steepest slowdown since the Great Depression of the 1930s. To understand the impact of the COVID crisis in the Latin American Insurance Industry, we interviewed Mr. Horacio Sanchez- Granel from Buenos Aires, Argentina, and Insurance & Reinsurance Consultant.

Mr. Horacio has been Chairman and CEO of Boston Seguros, P&C and Life Insurance company for 21 years. Previously, he held senior executive positions in three insurance companies and has several years of experience managing financial service institutions. He has also held other executive positions in an Argentinian oil company and a tractor and industrial machinery international company. Currently, he is a Board Member and part of the Executive Committee in Nacion Seguros, the state-owned insurance company. He also works as an insurance and reinsurance consultant for Argentine and Latin American markets.

Connect with Mr. Horacio – LinkedIn

The excerpt from the interview:

Customer Relationship during the pandemic

Insurance companies play a pivotal role during times of economic stress by helping companies and individuals manage risks and cushion against losses. How should Insurers respond to their customer’s needs, especially since there will be scrutiny about how they respond during this critical time — and it will dictate public perception for many years to come?

Mr. Horacio: Insurers must safeguard the interests of their clients and advise them on the scope of the coverage. They must communicate that the coverage is not infinite but rather has limits in terms of the risks covered, amount insured, and the origin of the claim. There are doubtful cases but insurers should be flexible enough and protect their client from damages. It was not possible to predict COVID-19. Both Life and P&Cs have been affected and have huge arrears to be paid. 

On the other hand, claims processes need to be more transparent. They should adhere to the compliances of the insurance companies. In these times, selling agents and insurance brokers should be more flexible and build close relationships with the clients. They should explain to them the possibility of the claim they are trying to reimburse. In Latin America, we don’t have many claims related to business interruption. That coverage is not very common here. 

Especially in Argentina, businesses have slowed down due to lockdowns. The claims ratio in this area is going down but claims in life insurance policies have increased a bit. However, the impact here is not as big as the USA or Europe.  

Business Continuity in the time of Pandemics

What are some new business models that Insurance Carriers are considering to meet the expectations of life in ‘The New Normal’? More specifically, where is the new business going to come from, for Insurance, over the next two years?

Mr. Horacio: The outbreak of the COVID-19 pandemic has changed the dynamics of work culture, human relationships, and daily routines. Many companies including insurers are adopting digital solutions within their operations. Organizations are reimagining their business models to adapt to new paradigms to be more sustainable and profitable. 

The New Normal has given rise to new coverages in various insurance lines to cover risks originated by this pandemic or any possible future pandemics. 

For example, new clauses such as Loss of Profit due to business interruption and pandemics in Life and Health insurance, and worker’s compensation will now be included in the respective policies. Interruption of business processes entails new set-up and investment. Some other new coverages will also be introduced such as the cost of maintenance due to the non-use of offices, premises, or industrial facilities. Cyber Insurance will now be a must as most of the workforce is working remotely. The rate of cybercrimes was much higher in developed countries before the pandemic, but now even the developing countries are at risk. This will accelerate the need for Cyber Insurance in developing countries. 

Road to recovery

Many General Insurance lines are hit- Travel, Motor, Home – what will be the road to recovery for these Insurance lines?

Mr. Horacio: Since people are avoiding travel altogether, the travel and motor insurance industry are hit badly. Many customers in Argentina are asking Insurance companies to give some discount on the premiums. We will see some big changes in these insurance lines. Going forward, on-demand or pay-as-you-use policies will prevail more in these insurance lines. 

Role of AI in pandemic crisis management

Before the Pandemic crisis began, technologies like AI have been instrumental in modernizing the business of insurance and advancing their digital transformation. Where are some of the biggest gaps being exposed to insurance organizations, and How is technology going to solve these problems?

Mr. Horacio: Going forward, AI along with IoT and other technologies will play a crucial role in the Insurance industry as a whole. They will rely on statistical analysis of large databases to predict future behaviors. The new challenge is how to incorporate unknown risks into the existing models to be able to properly underwrite and price risks, anticipate client behavior, facilitate complex operating processes, manage complex claims and detect possible frauds.

Financial assets are the main asset of an insurance company. They are under the influence of the volatility of financial markets. Technology here can help by analyzing different scenarios but the ultimate decision is in the hands of the banks. 

Challenges & opportunities in adoption of AI

Why Insurers hesitate to invest in AI?

Mr. Horacio:  Companies were investing in technology earlier, but now it has accelerated due to the unprecedented change brought about by COVID-19 pandemic. Not just the developed countries but in developing countries such as Latin America, I see a big wave of new investments in technology. Technology companies are also looking forward to this change. Insurers will eventually overcome their hesitation and invest more in AI and other technologies. 

[Related: 5 Challenges in AI implementation for Insurers]

Which area will see max Investment in AI- claims, underwriting, fraud detection, marketing in Argentina, and Latin American Insurance markets?

Mr. Horacio: Before the outbreak of the COVID-19 pandemic, investment in AI was more targeted towards claims, fraud, underwriting, back-office operations, etc. Going forward, predicting future scenarios will be a challenge. Historical data might not be useful here. Therefore, in the New Normal, all aspects of an Insurance company will have to be developed under the umbrella of AI.

Product Innovation

Consumers, now more than ever are seeking value-added experiences with the products & services they buy. How will these expectations amidst this Pandemic backdrop impact new product innovation within insurance? 

Mr. Horacio: Customers want a more palpable relationship with their insurers. Customer Experience is going to be a fundamental aspect during the purchase of insurance coverage. In addition to being simple, the purchase and subscription process will have to be perceived as a service that accompanies the client at every moment they need it. These additions will help insurers gain more information on their customer’s actions and behavior. Based on this data, they can dynamically adapt the coverage and pricing of the product. I call it — Dynamic-on-demand coverage. 

Challenges in Latin American Insurance industry

What are some of the technological challenges faced by Insurers in Argentina and Latin American markets operating in the New Normal? 

Mr. Horacio: Insurance industry for many years has been static but now is moving forward in many ways. The world including the Latin American Insurance is witnessing rapid development in terms of technology. The InsurTech industry is parallel to the Insurance industry. It aids in the development of the insurance companies. The whole world of insurance is making advances in technology. Different economics have different buying patterns for insurance products. One such insurance product that should develop is Microinsurance

Microinsurance needs technology, without which it is very difficult to manage. In a sense, the outbreak of COVID-19 was beneficial in accelerating these technological developments.   

[Related – AI can help bridge customer gaps for microinsurers]

Insurance buying behavior in the post-pandemic world

In a post-pandemic World, will insurance ever be bought offline? Or have we crossed the threshold for now buying policies purely online? 

Mr. Horacio:  Personal line insurances such as car, accident, personal, travel, microinsurance are mostly purchased online. In Argentina, 60% of the insurance policies are sold by traditional marketing and sales through brokers. However, in commercial, industrial, energy, transport, and large companies in general, the marketing and sales will continue the traditional ways but through electronic means. The use of IoT, sensors, drones dynamically monitoring the facilities and processes in different industries is increasing. Argentina, which is an agro-based country already has technologies such as drones and IoT which monitor the crops in place. AI will surely be crucial here to analyze the data and enable quick decisions in case of a fire or an accident.  

Wrapping up

Summing up — Mr. Horacio Sanchez-Granel shared valuable insights on the challenges in the Latin American Insurance Industry, how AI technologies can aid in policymaking and rise in dynamic-on-demand policies in the post-pandemic world.

AI is going to be essential for Insurers to gain that competitive edge in the post-pandemic world. Check out Hitee — an Insurance specific chatbot for driving customer engagement. For your specific requirements, please feel free to write to us at hello@mantralabsglobal.com.

Podcasts in this series:

Cancel

Knowledge thats worth delivered in your inbox

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

Description automatically generated

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.

Chart, sunburst chart

Description automatically generated

        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.

Cancel

Knowledge thats worth delivered in your inbox

Loading More Posts ...