How data, AI is propelling the insurance digital journey
Insurance firms are now aggressively adopting digital solutions to overcome decades of inertia in modernizing their businesses. The sector has leveraged the pandemic as a catalyst to accelerate a broad digital agenda and utilize the market inflection to tap into a plethora of exciting opportunities. This change is happening so rapidly that the insurance industry today exhibits a higher maturity in data analytics than several other industries. This insight is one of the key findings of the recently commissioned global analytics study conducted by Forrester Consulting on behalf of WNS.
The sector’s headway in data analytics doesn’t come as a surprise. Insurance companies are processing copious amounts of data at every stage of a policyholder’s lifecycle, from initial application underwriting through to claims settlement. Given that the data is received in structured, semi-structured and unstructured forms, it is important for insurance companies to invest in comprehensive data management solutions that encompass data ingestion, integration, warehousing, and analytics capabilities.
Data paving the way
Insurers are now intensifying their efforts to extract meaningful and actionable insights from data and as an outcome are creating a sound foundation for Artificial Intelligence-enabled systems and processes. McKinsey approximates the potential annual value of AI to insurance at USD $1.1 Trillion.
The Forrester study, commissioned by WNS, highlights that insurance companies are prioritizing the deployment of AI technologies in text analytics, AI-enhanced business intelligence platforms and speech analytics.
One of the key business focus areas that can tremendously benefit from data analytics and AI is customer experience, especially in the claims journey. As enterprises strive to acquire new customers and retain the existing ones, they can use the combined strength of the technologies to enhance customer journeys by improving experience at every touchpoint. AI has the ability to sharpen the digital frontier for insurance providers, and predict and protect from possible process breakdowns, thereby significantly reducing the risk of unhappy customers. Forward-thinking companies are increasingly looking to adopt AI-enabled omnichannel BOTs coupled with straight-through processing to respond to claims quickly and efficiently.
This strategy is driving these companies to collaborate with partners who can help create smart E2E straight-through solutions leveraging proprietary systems and third-party data to build intuitive algorithms that enable a fully immersive customer experience.
Pricing is another key area where data analytics and AI can make a decisive difference. By using complementary technologies, insurers can generate a 360-degree view of the customer and more effectively profile risks based on severity and frequency. This type of solution will not only allow insurers to accurately rate policies but also build a profitable book of business over time that improves combined operating ratios.
Future-ready organizations
The vital role of AI in countering fraud can’t be overlooked. With sophisticated fraudsters constantly on the prowl, insurers can use AI to build predictive claims fraud scoring models. These models, combined with intelligence on emerging fraud trends can enable companies to combat fraud more effectively.
From a broader perspective, the effective adoption of data analytics and AI will be key to insurers future-proofing their business and driving sustainable benefits in a digital-first era. Importantly, as organizations move forward in this journey towards intelligent automation, they must not lose sight of the human element. We foresee that the next wave of data-driven transformation will see the focus shift from AI to augmented intelligence.
