It’s an exciting time to be in insurance. Gone are the clichéd jokes about actuaries and red tape. In their place is a new landscape, with cool business models that take the basic premise of insurance and turn it into something totally different. AI is spurring big changes along every section of the value chain. In claims settlement, for instance, we are already seeing smart cars that can self-report minor accidents, and home sensors that can generate and submit a first notice of loss to the insurance company without the policyholder having to get involved.
Getting the digital actuary on board
Each company’s situation is unique – but there are some key guidelines that every insurer can investigate to leverage AI:
- Cast a wide net: examine every business process to identify likely candidates for AI, and assemble teams with expertise from a range of disciplines to ensure that AI algorithms properly take the business context into account.
- Make business processes AI-ready: there is no point bolting AI onto substandard and disparate business processes, so make sure they are optimized before you start – perhaps through a program of standardization.
- Leverage data: insurers should enforce stronger data governance, eliminating or phasing out siloed legacy systems with multiple views of data. It’s also important to make effective use of external data generated by IoT-connected devices.
- Acquire AI expertise: hire talent, partner with the companies that have it, and look to creating innovation hubs to seed new ideas.
- Try stuff out: promote experimentation within the company. You will need to take risks and innovate to hit on the right solution. Balance this with rigorous testing and measurement of ROI and business value.
Cognizant has broad experience helping insurers to introduce AI into their business processes (and take the next step with their business models). A case in point: Cognizant worked with a leading global property and casualty (P&C) insurer to improve customer experience with AI. With speech analytics applied to the caller’s diction, word choice and tone, agents can now better gauge sentiment, and use a dashboard to navigate through calls. Supervisors can now monitor all 8,000 monthly calls while slashing the review time by as much as 40%.
To find out more about AI in insurance, visit Cognizant’s Perspectives on Insurance.