I start the year by writing a new blog post, and after much thought about what to write about, New Year's resolutions are the hottest topic during these first days of the year.
And I ask myself, what are the insurance sector's goals for 2018, and how can technology help to achieve those goals?
After reading about it, I will summarize a little bit some of the main purposes that the insurance sector has set for this new year:
- Improve communication with consumers: This objective aims to reach more consumers and to ensure that they do not perceive the sector as a black box. Insurance companies are aware of the complexity of their language, so they are seeking to simplify it and there are already several initiatives aimed at improving understanding of the insurance industry.
- Improve transparency to the client: Along the same lines as the previous objective, the aim is to improve the understanding of the terms of the business itself, as well as to facilitate the understanding of the coverage included in the insurance contracts.
- Online insurance sales : The not so new channels of communication with the consumer are more present every day, so this purpose is still here. The sale through the online channel should not be neglected and it is sought that the consumer is increasingly confident in the recruitment from this medium.
- New data protection law: Do not forget the entry into force in May this 2018 of the new data protection law, companies must comply with the new regulation, because otherwise they face significant penalties, as we saw in the article Is your company ready for the entry into force of the GDPR?
- Innovate to make life easier for the consumer: This objective has been present in the sector for some years now, so that the advance of technology responds to the concerns of the user. In this area for the new year, the sector proposes that the client has new forms of relationship with the consumer, so that the client has more and more capacity of relationship with his insurance company. In the article Customer Experience, the value of a happy customer, the promotion of projects related to this purpose was already discussed.
These objectives are linked to the evolution of technology, to how customers relate to it and how it is increasingly part of our daily lives. Therefore, in this article I want to try to bring together the purposes of the insurance sector and the technological ones, and this is where AI and machine learning come in. At the end of last year, in the last edition of Big Data Spain, AI and machine learning were pointed out as the path on which technology will continue to bet during this year.
Why are we talking about AI and machine learning? Isn't it the same thing?
The definition of artificial intelligence (AI), refers to the idea of building machines that can think like humans.
The term machine learning is used to describe the idea of teaching computers to learn in the same way as humans.
The use of machine learning is becoming more and more widespread in the insurance sector, using it to fulfil their purposes every year. They rely on these solutions to build customer loyalty, improve their user experience and enhance communication with the consumer, among other things. More and more insurance companies are joining the use of these algorithms and I will show you some of the main lines in which they are being used:
Complaint management
The management of claims and the resolution of customer queries are important processes within the insurance sector. It is not only specific to this sector, but it is also an important part of it, as it is also a form of relationship with your customer.
In this area, AI is being used to enable claims to be classified so that parts of the process in which no human intervention is required are automated. The automation of part of the process improves the quality of the service, reducing time and with it the customer's perception of the insurance company.
Fraud detection
Fighting against fraud is a constant purpose for the insurance sector, since reducing it directly impacts on the company's loss statement, as we highlighted in the article Insurance fraud, an increasingly relevant problem.
Artificial intelligence algorithms can identify fraudulent claims and warn of such claims so that they can be pursued further, allowing the insurance company to take action much more quickly.
Product recommendation
The recommendation systems are a tool that allows to extract value from the preferences and historical information of the client. These types of algorithms, which have a certain level of autonomy in presenting recommendations to the scientist, are beneficial to both consumers and companies, since these algorithms inform consumers of products in which they might be interested. At the same time they help insurers to increase sales and improve customer perception of the company by enhancing the user experience.
Customer retention
The customer base is the engine of any industry, and how could it not be otherwise in the insurance industry as well? Not only are customer acquisition techniques important, but also customer retention techniques, since studies have shown that the cost of losing a customer is greater than the cost of gaining a new one. For all these reasons, insurance companies try to predict the loss of their clients in order to be able to apply in advance the appropriate measures that will allow them to retain their clients. In this blog post Learn how to predict customer churn with Data Mining and Machine Learningwe were digging into these algorithms.
Before finishing, I would like to emphasize the importance of data in the development of any of these solutions, many of the algorithms rely on historical data to implement models that help give the most accurate solution.
It is here where technology also plays an important role, first for the ability to store large amounts of data (Big Data), second, for the ability to collect information from both a multitude of devices (Iot, on this topic we can read in more detail in How will the Internet of Things change the insurance industry? and in How is the Internet of Things changing car insurance? ) and thirdly, for the ability to gather more and more customer perception at any given time.
For all these reasons, 2018 will be a year in which technology and the insurance sector will continue to go hand in hand, to fulfill their good intentions for the year.
