How data and AI are transforming the insurance industry

Digital transformation is central to the success of almost every business, and in the insurance industry, it is helping organisations improve customer service and develop new business opportunities. It has enabled organisations to make better use of data and artificial intelligence (AI) – and at Income Insurance, it is helping us better understand our customers’ needs and deliver more personalised experiences.

 

“The goal of digital transformation is not to replace human beings, but to assist humans to do their jobs better,” says Dr Yang Fan, Vice President, Analytics Centre of Excellence, Data Analytics at Income Insurance. “Insurance remains a high-touch industry, and with digital transformation we can enhance the customer experience and improve our financial consultants’ efficiency. This aligns with our long-term vision as a customer-centric organisation.”

 

Digital transformation is helping Income Insurance develop a better understanding of its customers’ needs, and the gaps in their insurance cover. “We share such insights with our distribution channels so that our financial consultants are able to sharpen their engagement with our customers by playing to their needs and closing their protection gaps effectively,” says Dr Yang.

 

Central to the success of the Income Insurance’s data transformation is its adoption of Amazon Web Services’ cloud services for scalability, secure data processing and advanced analytics. “As a data-intensive industry, we need to be able to store the data safely, access the data easily, and use the advanced tools to build better solutions. We have also moved all our AI solutions to the cloud,” says Hariram Veramani, Vice President and IT Business Partner at Income Insurance.

 

In addition to investing in a modern cloud data architecture, Income Insurance has catalogued the data it holds within the organisation, established a data security and governance framework and built a data-driven culture within the business. “These are critical steps which have helped us maximise the value of data within the organisation,” says Veramani.

 

This greater appreciation for data and customer insights has enabled Income Insurance to develop new business models and improve its offerings to customers. “We use data insights to develop personalised insurance products, pricing models and customer experiences that align with individual preferences and behaviours,” says Veramani. “We also implement micro service-based solutions for near real-time processing and servicing. For example, we build integrations with customers facing applications such as the Income Insurance mobile app and web applications for faster, real-time servicing for the customer.”

 

Data insights have also helped the insurer create dynamic risk models, which continuously update risk assessment models, allowing for more accurate pricing and better risk management. “Today, we are able to apply dynamic pricing to motor insurance to provide customers with the right prices, based on factors such as car model and make,” adds Veramani. “We have also been able to introduce a data-as-a-service offering, which has enabled Income Insurance to monetise its data assets.”

 

Generative AI (gen AI) is also having an impact on the insurance industry. Dr Yang identifies various ways in which this is disrupting the sector, such as reduced claims processing times, more effective communication and marketing strategies, and more flexible and customised products for consumers.

 

“The key challenge for the insurance industry is in balancing risks and opportunities,” explains Dr Yang. “The marriage of insurers’ wealth of customer data and gen AI is transforming the insurance industry. But with great power comes great responsibility.”

 

Indeed, Income Insurance is also taking steps to ensure it can benefit from such new developments responsibly. “Our AI strategy is to be a fast adopter through targeted experimentations and carefully selected use cases focusing on the benefit of enhanced operational efficiency and more efficient knowledge management,” says Dr Yang. “We have been fostering a responsible approach to AI, partnering with like-minded tech players, shaping AI governance policies with regulators as well as empowering our workforce.”

 

Data privacy, confidentiality and ethical use of gen AI is front of mind. “This is why we adopt a diligent approach in selecting and designing our first few gen AI use cases, only using publicly available and non-confidential data, and focusing on areas where AI can truly add value,” adds Dr Yang. “This allows us to mitigate the risks related to data privacy and the handling of confidential information.”

 

Income Insurance is also ensuring its own workforce is ready to leverage such tools. “We have implemented a 10-20-70 learning framework to upskill our workforce and foster innovation,” says Dr Yang. “That means 10 per cent of our employees who are data and AI specialists undergo advanced courses and training, and 20 per cent of staff closely involved in AI development are trained to ensure they are equipped with the right knowledge. Lastly, we build awareness among the remaining 70 per cent of our workforce through workshops and webinars.”

 

But one thing that’s clear is that no amount of gen AI will replace the personal touch provided by humans. “We will continue to adopt new technologies and create innovative solutions,” says Dr Yang. “But, no matter what, we always keep customers at the centre of everything we do.”

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To find out more about Income Insurance, visit www.income.com.sg/.