By Ashley Popham, BriteCore
Emerging technologies dominate insurance headlines and conferences today, offering digital strategies to enhance multi-channel customer engagement, automation, and operational efficiency. The overwhelming buzz requires companies to distinguish practical, cutting-edge strategies from bleeding-edge red herrings.
This two-part series overviews current technology trends and realistic use cases in insurance. In this edition, learn which technologies are improving customer experience and advancing digital data capabilities, and which are low-return distractors.
Insurers are applying new technologies to enhance customer experience, focusing on connected, easy-to-use, self-service processes for insureds. Customer experience technologies revolutionizing insurance include direct distribution, chatbots, augmented and virtual reality, and gamification.
- Direct Distribution – Insurers use self-service technology to anticipate and meet digital consumer expectations. These initiatives build insurance products from the inside out, starting with customer experience and adapting products to fit ideal experiences. Examples include websites, portals, and apps from which insureds can purchase and maintain insurance products. Insurers are also launching agent and adjuster apps to expand self-service and multi-channel opportunities.
- Chatbots – Chatbots (through programmed rules or artificial intelligence) interact with users through chat messages. Insurers can use chatbots to automate customer service and enhance direct distribution processes. There are three major use cases for insurance chatbots:
1. User-initiated processes, such as FNOL submission or policy application
2. Information retrieval directly from your website, insured portals, or staff portals
3. Product integrations with digital assistants, such as Alexa, Siri, and Google
- Augmented and Virtual Reality – In augmented reality, users superimpose digital elements onto the world around them, much like stickers on social media platforms allow you to add digital layers to pictures taken from your smartphone camera. In contrast, virtual reality refers to immersion into a virtual world. Insurance use cases are limited, generally focusing on interactive courses for staff and insureds
- Gamification – Gamification applies gaming qualities to everyday business processes. Fitbit’s downloadable app provides a prime example of gamification. From the app, users can view progress towards daily walking goals, log eating and exercise habits, and challenge friends. Insurers can offer similar social engagement opportunities and incentives for wearables, telematics, and Internet of Things (IoT) data, rewarding safe habits that lower risk. Insurers are also investigating gamification (sometimes in combination with augmented or virtual reality) to enhance insured and employee education.
Advances in data collection (drones, IoT, telematics) and data processing tools (big data, artificial intelligence, robotic process automation) create more comprehensive data than ever before, offering groundbreaking insights.
- Internet of Things (IoT) – More than 20.35 billion connected IoT devices are installed today worldwide, and the number is projected to grow to more than 30.73 billion connected devices by 2020. IoT devices, such as smart thermostats and smart locks, enable constant monitoring and remote access for everyday processes. These devices can provide carriers with detailed data about property safety and insured lifestyle. IoT data has potential to boost claim processing and risk analysis efficiency.
- Automobile Telematics – Automobile telematics offers new data sources to insurers. Through device installation in policyholder vehicles, insurers track detailed vehicle data, such as speed, location, and sudden stops. Insurers can process data to enhance risk assessment precision. Many carriers (including Allstate, Progressive, and State Farm) offer premium discounts for telematic installation and safe driving habits, improving customer experience.
- Big Data – Big data is infrastructure that stores carrier data and tools used to query and build visualizations on top of the data. Big data also relates to predictive analytics. By inputting IoT, social media, demographic, and website analytics, carriers can create customer profiles. Through profile comparison, carriers can predict behaviors such as cancellation and renewal likelihood. Carriers can even use big data for fraud detection, comparing a claim submission with an insured’s previous claims to check for similar language.
- Artificial Intelligence (AI) – AI uses computers to learn and make decisions. AI has a variety of insurance use cases, including data processing, driverless cars, and advanced image, voice, and text recognition for chatbots. Most promising of these use cases involve data processing. Carriers implement AI to search extensive databases for patterns, leading to new insights. AI works hand-in-hand with big data, IoT, and telematics: IoT and telematics provide vast data sets, big data provides an interface for manipulating data, and AI analyzes data to draw new insights.
- Robotic Process Automation (RPA) – RPA and AI both use computers to process vast stores of data. While AI uses machine learning to learn and improve decisions over time, RPA machines can only process and make decisions through defined algorithms. RPAs automate repetitive processes, such as time-consuming duplicate entry. Carriers investigated RPA to improve malfunctioning core systems, but attempts were found unfavorable.
- Drones – Drone and satellite use are rapidly expanding among insurers. Adjusters and inspectors use drones to automate site inspection processes further. Through visual and thermal imaging, drones provide precise data allowing carriers to assess risk and damage more accurately. Drone usage can increase underwriting and claim information efficiency by as much as 40%.
- Blockchain – Insurers use blockchain to manage policies and payments. Created to eliminate unnecessary third-parties in transactions, blockchain offers secure digital record management. Using cryptocurrencies, like Bitcoin, carriers automatically create contracts to process transactions when publicly recorded events occur (such as flight cancellation for travel insurance). Records cannot be changed, providing reliable records. However, difficulties arise if an error occurred in the original transaction but cannot be undone. Blockchain also gives everyone complete access to read and write transactions, increasing transparency but decreasing privacy.
Innovative technologies are beginning to mature, creating perfect opportunities to implement new use cases into your product offerings. Consider your business strategies today and how you can enhance your customer experience and digital data offerings. In the next edition, we will discuss how to create a holistic digital strategy that can truly modernize your company.
This article was originally published in the Spring edition of the PAMIC Pulse.
- “Internet of Things (IoT) connected devices installed base worldwide from 2015 to 2025 (in billions),” Statista, 2018, https://www.statista.com/statistics/471264/iot-number-of-connected-devices-worldwide/
- “EY Digital Transformation in Insurance,” EY, 2017, http://www.ey.com/Publication/vwLUAssets/ey-digital-transformation-in-insurance/$FILE/ey-digital-transformation-in-insurance.pdf
Ashley Popham is a Communications Specialist at BriteCore with 5 years of combined experience in research and technical communication. Ashley holds a B.S. in Professional Writing from Missouri State University and a certificate for Inbound Marketing. Since joining BriteCore, Ashley has created numerous custom training videos, articles, and instruction guides for insurers aimed at helping them better engage staff, agents, and customers. If you’re curious about digitalization strategies or want to learn more about BriteCore, email Ashley at email@example.com.