Insurers that embrace artificial intelligence and automation will gain a competitive edge that could help them swallow their rivals in the future, experts have said.
Intelligent Insurer’s latest whitepaper, Why Automation & Artificial Intelligence Matters For Commercial Lines, highlights how technology and machine learning will help process huge volumes of data to produce higher quality insight faster, and bring greater value.
David Lundgren, CEO of Quantemplate, said that automation and machine learning gives insurers the ability to automate and process greater volumes of incoming data faster than ever before.
But many in the industry will be familiar with the barriers to automation that legacy systems can pose. However, Will Brocklebank, founder and Executive Chairman of Shepherd, said: “Legacy systems are often blamed, but no industry has faced digitisation without these same problems, and many of them have crossed the chasm.”
He said that the large players often act as though the coming insurtechs can’t exist without incumbent capital and reach. “This may well be the case for many of them, but the opportunity for insurtechs to collaborate with each other to supply all the parts of the chain – from customer acquisition through pricing, risk management, capital sourcing and claims to ongoing service – is not as far-fetched as some might believe.”
Brocklebank suggested that the problem isn’t the technology, it is the processes the sector uses. “To be fair, that process problem will be solved by the first large insurer which decides to force digitisation and automation into its systems over a two-to-three-year period, despite the cost,” he added. “Failing to do so will end up bringing the highest cost of all.
“I predict aggressive mergers and acquisitions in three to five years, in which those who don’t automate will evaporate,” said James Breeze, Digital Artificial Intelligence and Analytics Lead at AXA XL. Breeze pointed to his company’s collaboration with AI specialist Cytora, which has enabled the firm to source and analyse data from multiple sources, including external data from websites, news articles and government and industry datasets, to create new insights into risk. “These insights help actuaries at portfolio level to identify new profitable segments, help underwriters to improve risk selection and provide tailored risk solutions for clients,” he explained.
AXA XL is also working with Expert System, an Italian software company that develops cognitive computing software based on AI algorithms. “We are using their platform to automate the process of reading site survey reports through natural language processing, which gives our engineers more time to understand our clients better and advise our underwriters, who can in turn provide better solutions and faster quotes to our brokers and clients,” said Breeze.
The value of partnering with specialist firms is also highlighted by Erik Abrahamsson, founder and CEO of Digital Fineprint, which is working with insurance firm Hiscox. He said the two companies had worked together to improve the digital customer journey by driving insights from open data using AI and big data analytics.
“SME policy buyers could receive tailored insurance recommendations by providing the platform with just two lines of information: the company name and postcode,” he said. “This significantly reduces the time spent by business owners filling out a quote form and encourages upsell and better customer engagement.”
All contributors to the whitepaper are speaking at the Intelligent Automation & AI In Insurance Europe event on May 21 in London.
To secure your place with a discount of £100, enter BR100 when you register here: www.intelligentautomationeurope.com