August 24, 2017 | Written by: Praveen Velichety
Categorized: Customer Perspectives | InsurTech
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Rapid digitization and changing customer demographics are putting immense pressure on the insurers today and making them rethink the way they run the insurance industry. Millennials, who are the true digital generation, have already taken over the baby boomers and now make up a quarter of the UK population as per the Inkling Millenial Report 2015. Almost 20% of millennials say they would buy insurance from Google since they are easier to reach as per a recent IBM Institute of Business Value study (read more here).
How is then the insurance industry adapting to the cultural change with the new millennial buyer and getting ready for the next big disruption in the market?
From changing the business model to adapting to the constantly evolving regulatory compliance and data security, disruptive InsurTech players and changing customer expectations, the insurance industry clearly experiences a growing appetite and need to innovate and remain relevant for future generations.
Digital technologies today have empowered customers and will disrupt virtually every industry and profession, including insurance.
On June 15, in London, we partnered with the Insurance Network to host a session on Artificial Intelligence (AI) & Machine Learning within the TINtech event, to share how IBM cognitive capabilities are helping insurers in multiple areas like customer interactions, connected claims, risk and regulatory compliance.
Here are the key takeaways from the event:
Cognitive & Augmented Intelligence Keynote Session
Noel Garry, IBM’s European Insurance leader for Watson Financial Services was joined by few other industry experts to explore how AI and machine learning will impact insurance and debate how insurers should respond.
As insurers currently face increasingly new sources of real-time data from sensors, telematics, wearables and other mobile devices, the challenge is to interpret this data and incorporate new insights into traditional products, underwriting, operations, and claims decision making.
In a recent study by the IBM Institute of Business Value, insurance executives agree that cognitive computing has the potential to radically change insurance. Among insurance leaders familiar with the technology, 98 percent believe it will play a disruptive role in the industry, 85 percent believe it will be critical to the future of their business and, as a result, 96 percent said they intend to invest in cognitive capabilities. To read more, click here.
Cognitive computing system can help you achieve the following:
- Understand – images, language and other unstructured data in claims photos, underwriters’ notes and contact center recordings.
- Reason – by comprehending insurance concepts, forming hypotheses and inferring and extracting ideas.
- Learn – by developing and sharpening expertise with each new data point, interaction and outcome.
- Interact – with employees and policyholders in a natural way that allows cognitive solutions to dissolve barriers between humans and machine.
To summarize, both the panel speakers and the audience concluded that Artificial Intelligence & machine learning will definitely bring a level of automation and will significantly transform the insurance industry.
It will however not act as a replacement factor, but rather look into enabling individuals to process data faster and bring simplicity into critical areas of the business such as regulatory compliance.
Showcasing IBM Insurance Solutions
Throughout the conference and also as part of the technology use cases we showcased, we observed an increased interest around innovation and how that can be applied in the industry – either looking into incremental operational improvements or leading-edge technology and how to use AI to support various projects. One of the key areas of interest was represented by our Bluemix PaaS platform and IBM Blockchain.
To conclude, insurers, today, are looking at their business through different lenses:
- First, they are analyzing what capabilities do they have today and what they need to acquire to improve business profitability
- The second dimension is they are waking up to the realization how the new technologies are disrupting traditional industry models and giving way to new profitable business models.
Whether the technology is Blockchain, the Internet of Things or cognitive computing / AI, insurers ought to embrace the technology wave and adapt to the changing landscape of the industry in order to stay competitive and relevant in the market.
To learn more, visit ibm.com/insurance.