3 Ways Insurers Can Use Emerging Technology for CX

As insurers redesign their products to be more human-centric through innovative business models like on-demand insurance and building UI/UX-minded mobile apps, many are enlisting back-end and front-facing emerging technologies to optimize both EX and CX.

Of course, no single technology alone promises more accurate risk assessment or easier claims processing. Rather, each one addresses a specific pain point and, when used in concert, helps to make it easier for companies to administer coverage and for customers to purchase and use it.

“Insurers have always struggled with the fact that their main customer interactions after purchase are submitting a claim or paying a bill, which tends to be a negative, stressful experience,” Jeff Goldberg, EVP of research and consulting at Novarica, said in a recent webinar with CCW Digital, ‘Insurers Explore their Future with Emerging Technologies.’ “Using these new digital channels is about creating an ongoing, long-term relationship with the insured outside of bill paying and claims submission.”  

Here are the three key types of technology investments and their overarching objectives:

1. Drive information-gathering

In order to provide more flexible insurance models like pay-as-you-live and on-demand, insurers need to gather more information on their customers than ever before to properly assess risk, especially when adjusting for complex variables like, well, human behavior. For instance, some health insurance companies track customer behaviors using wearable devices to adjust their premiums commensurate with positive and negative lifestyle habits like exercise, sleep and diet.

The Travelers, which provides a range of insurance policies, is working with construction contractor Gilbane to test IoT devices and wearables for claims-related processes, including automatically detecting falls, monitoring equipment location and usage, remotely triggering alarms, reporting hazards or incidents, and providing real-time incident details.  

Meanwhile, car insurance providers use telematics technology to monitor driving habits using a GPS and onboard diagnostics to record movements on a computerized map. Doing so allows them to provide premiums adjusted for the actual consumer and differentiate their rates, rather than slapping a blanket premium on all drivers of a certain demographic, regardless of their risk profile.

Since on-demand insurance allows customers to request coverage for specific items during specific events, such as covering one’s skis during a ski trip, insurance companies also need to monitor and verify the customer’s use of the policy to prevent fraud.

When it comes to claims processing, insurtech companies offering property and casualty insurance deploy drones to assess the extent of the damage. Take the case of agro insurance, which potentially covers thousands of acres of land. In the event that a drought strikes and the landholder files a claim, the insurance company needs to verify the extent of the damage.

Rather than deploying claims officers on-site to comb thousands of acres on foot, the insurer uses satellite imaging or drones to assess the damage. After Hurricane Harvey, property insurer State Farm used SenseFly’s drones as part of its post-disaster CAT response.

2. Big data and data analysis

Given the reams of big data insurance companies are constantly collecting, machine learning technologies are crucial for analyzing the numbers and turning them into actionable insights that inform risk assessments, claims processing and customer support in real-time. Predictive statistical modelling helps insurers manage risk, where AI predicts what will happen in the future by measuring and understanding what happened in the past.

Manipulating big data is also important for gleaning customer insights: acquiring a comprehensive understanding of customer behaviors, habits and needs to anticipate future behavior and offer relevant products. Data collection and analysis is an area where insurers lean most heavily on what Goldberg calls their “core systems,” legacy systems which many insurers are either replacing with newer ones or actively enhancing.

“All of your systems have to work together - you can’t just focus on digital,” said Goldberg. “If you don’t have a core system that can support real-time analysis and information-gathering then your digital channel is going to be less effective.”

3. AI for analytics

Beyond turning analytics into actionable insights, AI can help insurers act upon those insights. For example, AI can help property insurers view and make sense of satellite imaging following a natural disaster to gauge the extent of the damage, and also pull insights from unstructured data. Web portals using AI-assisted virtual claims settlement makes it easier for customers and agents to settle and pay claims after an accident while reducing the likelihood of fraud by picking out inconsistencies and flagging at-risk individuals.

Robotic process automation is another high-investment area for insurers, specifically: “using algorithms, screen scraping and AI technologies together to make our operations more efficient and less offensive,” explained Goldberg.

However, all of these technologies must be used in tandem as an overall strategy for digital innovation. For example, InsuredMine, a technology company that helps insurance agents enhance customer relationships through proactive engagement, combines an AI-powered chatbot, analytics, and digital solution - including an agency portal and mobile app - to help agents provide omnichannel customer engagement.

While your data gathering might be robust on the back-end, allowing you to build more detailed customer profiles to assess risk with more accuracy than ever before, your digital investment also needs to yield gains in the customer experience.

This is where UX design comes in. Goldberg says most insurance companies are comfortable with enlisting a third-party IT partner to build their core systems, but when it comes to their customer-facing applications, insurers prefer to design their own user experience as a source of differentiation.

“When it comes to the face of the company, like the customer portal or mobile app, that is what you really want to own from a design, workflow and branding standpoint.”