May 28, 2021
From the Dais Research Team
AI and Insurance
Having worked with AI to build insurance products and generate ideas, we know that an AI-driven insurance future is closer than most people think. Depending on your definition, it might already be here. The primary advancements AI will enable are:
Hyper-Personalization
From the substance of the products offered to the nuances of a user’s experience flowing through an application, AI has the potential to customize the experience to a specific person. With the correct data, AI can generate a tailored experience and an offering designed for a specific client in real-time.
Product Innovation
AI is surprisingly creative. This instantaneous and powerful creativity will empower insurers to create new products that humans haven’t dreamt of before.
Automation
AI has the ability to perform a host of simple tasks for us, which will give people the ability to spend more time focused on value-adding tasks.
AI is going to transform the way we work in the insurance industry, so this week we are focusing on a recent report by Deloitte about AI and Insurance. Below, we’ve summarized a few key ideas and provided some insights.
Report summary
Deloitte Research: Artificial Intelligence and Insurance
What: Deloitte explores the future of AI and insurance and the impact of AI on established insurers. This in-depth look provides great insight into how AI will change our future.
Read: The Age of With™ – Accelerating the impact of augmented intelligence in insurance
Takeaway
Systemic challenges are no longer acceptable
What they’re saying: “Rapidly evolving technologies have collided with longstanding customer issues to create what we believe to be a series of deep, lasting, systemic challenges for insurance. Today’s insurers are being compelled by their existing and new competitors to deliver new offerings to better meet consumer needs and preferences.”
Takeaway
Premium growth will come from unconventional markets
What they’re saying: “Growth potential will be concentrated in non-traditional markets due to the accelerated technological abilities of new players… The macro environment shifts are usually outside of an insurer’s control, and variables are extremely versatile. Therefore, insurers should focus on: ‘How can I bring more relevant product offerings for customers?’ ‘How can I explore new ways to generate revenue, such as reducing cost with automation, or discover new risk categories?’”Why it matters: Insurance buying patterns are shifting away from the traditional model. Digital is a big part of that shift, but there’s also a surge in insurance product innovation that is improving customer acquisition through better targeting.
Takeaway
Why AI is important for Insurers
What they’re saying:
- No matter the size of the customer, high-touch service is going to be expected.
- Customer targeting is about to change. Insurers need to shift from offering segment- based products and promotions to offering hyper-personalized products and engagements.
- Insurers need to shift from being reactive and only responding to customer-initiated actions to a more proactive, preventative mindset – and develop better tracking and predictive capabilities to pre-empt customer needs.
Why it matters: This is the continuation of a larger trend. Where carriers were once able to dictate how business was transacted (and some are still trying with carrier portals and the like), consumer expectations are changing quickly. Insurers need to adapt.
Takeaway
Underwriters will be customer portfolio managers and strategic analysts
What they’re saying: Insurance work is going to be transformed with AI assisting underwriters with what are currently time-consuming tasks. Because of this shift in work, underwriters will become more customer-focused and involved in managing loss ratios.
An alternate take: AI is going to streamline a lot of what underwriters do today, so a few underwriters will be able to handle what previously required an entire department. For larger accounts, underwriters will collaborate with product setup and new product creation.
Takeaway
Agents will evolve into specialized customer experts and ecosystem integrators.
What they’re saying: Agents will leave behind routine work, shifting to be even more customer focused, and will use their additional time to work directly with clients. This will deepen agents’ understanding of their customers, which in turn will make them valuable resources for the rest of the organization.
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