Welcome to the second part of our mini series on the key insights we gathered from our first insurance roundtable meetup.
If you haven’t read our first article on the topic, I highly invite you to check it out before you continue reading this second post.
The first part of our mini series covered lots of great insights we collected by meeting with top experts in different sectors connected to the insurance industry for an informal roundtable event.
The event format is discussed in the first article. In a nutshell, we invited renowned thought leaders who work in insurance, reinsurance, consulting, insurtech, and other technology partners to join us and share their ideas about different topics connected to the insurance industry, the status quo and the future.
No presentations, no keynote speakers. Everyone was invited to share their opinions at different pre-selected topic tables.
By the way: if you want to receive an invite for our second meetup, feel free to check the form linked at the bottom of this article.
In our first blog post we reported on key learnings we gathered about digitalization, customer experience, change management, data and regulations, customer service, and sustainability.
Let’s move on now and discover some of the other insightful opinions that were shared during the event.
Artificial Intelligence in the Insurance Industry
Considering the key role of ExB in the area of Artificial Intelligence for insurers, it’s not surprising that this topic table captained by none other than our own CEO Dr. Ramin Assadollahiwas the most popular.
Lots of guests decided to join the conversation and pitch their ideas when it comes to opportunities and constraints connected to the implementation of artificial intelligence in everyday operations.
The conversation revolved around a provoking question: imagine you have access to every possible AI-driven solution in the market. You can now re-imagine a completely automated business model optimized purely through machine learning. What would be the role of us humans in such an imaginary company? What people and skills would still be considered essential and irreplaceable?
Most of the participants agreed on the fact that empathy is still a key element in every service business. Understanding and consulting customers is a prerogative of people.
Chatbots and data extraction technology can collect and process information but the whole consulting and selling process still requires a human touch.
We, as humans, are good at sensing the tone, walking in someone else’s show, and understanding the needs of others. When it comes to creating trust and providing advice we still rely on people and faces.
We not only understand and interpret information as AI does, we’re also able to read the subtext and extrapolate information from emotional cues.
People trust what they understand and are familiar with. We’re familiar with faces and with people. We’re still unfamiliar with automatic feedback processes and the actual limits of artificial intelligence.
Hence, for now, every business area that relies on trust and support still requires human resources.
Additionally, people are also good at dealing with exceptions and are more flexible even in comparison with the most powerful learning system. This means that decision-making processes in grey areas where there is no clear factor that decisively moves the needle of the scale one way or the other, are better handled by humans.
In this case, we’re faster at adapting and coming up with a plan B by, for example, coming up with a new set of criteria that might still be influence the decision
The Role of AI in the Near Future
Automation is great at taking over when tasks are repetitive and add little to no value to the whole chain. What AI seems to do best is supporting such systems when rules aren’t enough.
Simple workflows that are always the same and always rely on the same pieces of information are easy to automate with rule-based systems.
But when uncertainty or variety enters the game, rule-based systems fail.
AI can provide that on-the-spot kind of approach that a human being would adopt when dealing with improvisation based on learnings and past experiences.
In this case, intelligent systems can take over more complex tasks as artificial intelligence together with a feedback learning mechanism helps insurers automate all workflows.
The other immediate benefit of current AI-driven systems is optimization. While human performance in terms of processes plateaus at a certain level (when the marginal advantage from adding resources drops) machines keep providing better output the more input they deal with.
Artificial intelligence can deal with and process a much larger amount of data while also being able to make sense of such information by spotting cause and effect relations or correlations that we wouldn’t be able to identify.
The role of artificial intelligence in the near future is therefore connected to maximizing insights, increasing output, and optimizing processes.
Which seems wonderful. Until you try.
AI Operations and Constraints
Everybody seems to be trying to implement more and more intelligent systems but nobody seems to be quite there yet.
What does this mean?
There’s a lack of centralized processes that allow insurers to connect the dots across different stages in the value chain.
Real time use cases are segregated to single initiatives that don’t contribute to providing an end-to-end overview.
It seems like single trick ponies are hindering the development of AI Ops and that insurers should rely more on centralized platforms that allow them to concatenate and simultaneously optimize different steps in the customer journey.
Connecting the dots is the only way insurers would be able to guarantee the ROI for AI Ops with maximum scalability.
One-stop-shop solutions are responsible for the boost in speed when it comes to digital transformation. The same happened with automation. And the same is happening now with platforms that implement AI to take control of all processes and workflows at once (like ExB when it comes to Intelligent Document Processing compared to other solutions in the market that only process one type of documents or multiple types for single workflows though).
A Future Digital Lifecoach?
Going back to the topic of consulting, not only is the presence of a human being still important in terms of trust and empathy.
The idea of having a digital lifecoach that advises us on topics like insurance or financial decisions might still be a very far-fetched vision due to the lack of contact points.
Insurance is a low frequency business. To understand the limitations that derive from this fact, compare insurance to Amazon.
Amazon has in some cases daily interaction with each single customer (from Alexa at home or in the car, through their weekly grocery list in Amazon Fresh, their purchases, presents they buy, movies they watch, music they listen to, photos they store and so on).
There’s enough data for learning systems to gather insights,draw conclusions, make decisions, provide advice, collect feedback, learn, and improve.
Again, as mentioned in part one of this mini series, insurers would wish to have such a complete overview of their customers. But right now, they only have access to the data they provide when signing a policy or filing a claim.
Insurers need to actively create touchpoints with the customers to have the opportunity to interact with them and collect more information. Nothing happens automatically yet.
Internet of Things
Interconnection and automatic data collection are changing things a little bit.
In North America, insurers incentivize their customers to provide constant access to driving data in order to adjust the premium of their car insurance policies. In Germany, we’re trying to do the same.
But privacy is a big obstacle to personalization. Not many people in Germany are willing to share their telemetry data and give up the opportunity to push the pedal to the metal on the Autobahn to save a few bucks on their car insurance.
Would people allow insurers to connect to their wearable devices like fitbits or smartwatches to adjust their health insurance policies while providing consulting and coaching to become healthier?
The role of insurers would definitely change. They would be perceived as partners. They could lower premiums and earn more by coaching their customers financial, health, legal, driving, or work-related matters.
The Future of AI
When asked to envision the future of AI in the next ten years, the majority of participants agreed on the fact that ten years is too wide a scope when it comes to artificial intelligence.
Things move way too fast in this sector. But they all seemed a bit skeptical (and sadly pessimistic) by saying that this will probably have no actual impact on operations in insurance as they’ll still be catching up on current technology.
Others were a bit more optimistic as they saw how quickly insurance companies managed to adjust processes in response to external changes brought in by the COVID crisis.
Digital transformation picked up speed as a response to external constraints. The same might hold true for AI as well.
But going back to the very initial topic about full automation and the role of humans, the question still lingered: will there be enough space for human beings in the future?
The answer is absolutely yes.
Exactly as it happened after the industrial revolution, the introduction of machines in production or computers in business processes, also the introduction of AI is not reducing the absolute number of people employed, just their roles and job titles.
The boost in quantity and speed of access to data led companies to open the doors to more data scientists, specialists, and engineers. Automation led companies to look for more staff members whose competencies allowed them to supervise and maintain automated processes.
Machines and automation allowed companies to increase supply and meet customer needs. Reducing production costs was not the main target. Profits increased by meeting demand faster, selling more, introducing variety, creating new demand and so on.
The main benefit of successful AI Ops isn’t the cost reduction derived from intelligent automation. The long-term benefits of AI systems are connected to optimization, speed, better employee experience, increased personalization, and a better customer experience.
People will still remain the main resource in business processes. Their role will evolve over time though and move more and more toward value adding processes only.
The Long-Tail Effects of the COVID Crisis
If you follow ExB you know that we already covered the effects of the current COVID crisis on insurance as you may be familiar with our survey report.
The report solely focuses on the unexpectedly positive effects of the pandemic crisis on innovation and technology in the insurance space. The unique focus of the study (in a time in which most of the publications only reported on issues and losses) allowed us to earn a lot of visibility and our report was mentioned on several news outlets such as Handelsblatt, Wall Street Journal, Focus Magazine, Süddeutsche Zeitung, and many others.
Since we had already carried out plenty of interviews with top insurance representatives for our study, during our event we let people talk freely about salient aspects that characterize the current situation.
Higher Efficiency at a Cost
Participants mentioned that the opportunity to work from home had a profound impact on their daily lives both positive and negative.
On the one hand, people reported that working from home definitely leads to higher productivity thanks to the more efficient use of time. Plus, not being forced to commute also positively affected their personal and family life through higher flexibility.
In a way, the opportunity to work remotely is directly connected to a better employee experience: Better working conditions, higher levels of productivity, more satisfaction, optimal work-life balance.
On the other hand, though, many mentioned the fact that they miss the direct interaction with their colleagues. And not specifically when it comes to work-related situations. Sometimes the lack of small talk in casual conversations is what makes things difficult.
Socializing at work is not only connected to well-being but also to better results. Working together means trusting each other and getting to know each other to communicate easily and smoothly.
The lack of social interactions makes it difficult for employees to feel close to their colleagues.
Heard it Through the Grapevine
Informal conversations with colleagues are not just important when it comes to bringing team members closer to each other.
Another important aspect of random kitchen talks is also the fact that people are often exposed to different work-related topics that they wouldn’t know anything about otherwise.
It turns out that employees often gather vital information about their company, other departments, and even important facts relevant for their own activities while sipping coffee with colleagues. It’s not just soccer, weekend trips, and dangerous rumors.
Plus, meeting in the cafeteria or in the courtyard is often the only way for people to interact with colleagues who work in other departments.
Since this essential component is missing, the only way to get information now is actively searching for it. But since people can’t look for something they don’t know exists, they aren’t exposed to the same amount of information as before. This problem sometimes even impacts projects.
It turns out that socializing is extremely important for building teams, carrying out successful projects, and partially overcoming issues related to siloed initiatives.
That’s usually not an issue for startups and tech companies that are used to communicating in public channels on platforms like Slack. The more communication happens in public channels, and the more chat channels people are allowed to join the better picture employees receive of the company, its goals, its current challenges, the status quo, and so on.
And this often leads to cross-functional when people from different departments spontaneously join conversations and provide unexpected support, data, or information.
Additionally, tech companies, startups, and scaleups are often born as remote-first companies and are used to dealing with similar issues and use technology to collect data and information or to have people join virtual watercooler conversations.
More and more insurers are now introducing tools like Microsoft Teams or similar together with virtual meeting spaces. It’s a matter of time before companies will overcome all the problems connected to the lack of face-to-face interaction and become fully functional in the digital space.
The Future is Now: The New Focus for Insurers
As discussed in this mini series, insurers are overcoming all the obstacles when it comes to digitalization and are promoting end to end initiatives aimed at creating a better customer experience while finding the right balance between automation and personal interaction.
Additionally, companies in this space are getting used to the new working conditions and optimizing their infrastructure to facilitate collaboration.
During the event we also covered topics specifically connected to the future of insurance.
Our participants underlined the fact that the focus for the near future is on creating value throughout the entire customer journey. Insurers need to optimize processes and eliminate (or automate) all those activities that don’t directly contribute to creating customer value while investing more energy into smooth processes and personalization.
This might involve new channels, new and more customized products, better collateral solutions, more touchpoints with the customers, and more intelligent data processing solutions.
The idea is creating communities and taking care of them. Something that should be possible thanks to modern technologies that allow one-to-many channels to be as efficient as one-to-one communication.
Join Us for Our Upcoming Event
Two articles, no matter how long they are, can’t cover all the insights we gathered by bringing together so many great experts and having them talk freely about relevant topics that are shaping the future of insurance.
We tried to make a selection of interesting learnings, but our participants went home with a lot more than simple information. People from different areas and industries connected to the insurance world sat together and were exposed to different points of views they’re usually not exposed to.
Our participants enjoyed the informal setting of our event and left the virtual meeting room with lots of information, new ideas, and new connections.
We call it a success.
And that’s why we decided to organize a second meetup (September 23, 2021) with new topics and a slightly improved format based on the feedback we received from our participants.
Would you like to join us?
Click the picture below, fill out our form, and you’ll receive more information about our second Insurance Roundtable Event.
Let’s learn from each other!