Technology, and the way that it will impact the financial services sector, are currently very hot topics in the industry. Many insurers have been forced to take time to determine what the Fourth Industrial Revolution means for their business and how they can use technology to enhance the customer experience. This is at the heart of this revolution.
The Insurance Institute of Gauteng (IIG) recently held a seminar which focused on the insurer of the future where the role of the intermediary – as the industry’s most valuable player – was highlighted.
Sedick Isaacs, Head: Business Support Services at Bryte, asked if there still a space for intermediaries in an artificial intelligence (AI) driven revolution.
"While 84% of respondents to a recent survey agreed that traditional organisations must evolve and adapt before they are disrupted, we need to have an honest assessment of the value of the intermediary. On the one hand, intermediaries have played a pivotal part in the success of the insurance sector. However, with the rise of technology and its adoption within the industry, many intermediaries are wondering where they fit into this puzzle," said Isaacs.
He pointed out that AI is being used by more insurers to streamline the claims process and provide technical support and guidance.
“Chatbots have become new intermediaries. According to Forbes, over 74% of consumers prefer computer-generated insurance advice and 34% of consumers would like more companies to use chatbots. It is not all doom and gloom for intermediaries; two thirds of consumers from the same survey still want human interaction when dealing with complex claims,” said Isaacs.
He added that the explosion and increased use of technology in the insurance industry has presented new opportunities for intermediaries. Customers will increasingly rely on intermediary partners for guidance and advice about emerging tech solutions and new specialised insurance products.
The intermediary of the future
Having established the relevance and importance of the intermediary within the AI insurance space, we need to understand the intermediary of the future.
“The combined strength of AI and human ingenuity will inform the future intermediary. The future intermediary will be expected to solve complex challenges and assist insurers to develop new products and services,” said Isaacs.
He added that intermediaries of the feuture must be able to:
secure best prices;
identify risks to advise properly;
take advantage of machine learning to personalise the cover of the customer; and
promote a customer centric approach and enhance the customer experience.
The increasing impact of technology makes it easier for insurers and intermediaries to exist in an interconnected world.
If clients, insurers and intermediaries are moving towards existing in an interconnected world through technology, surely criminals will also be moving their business online. The dangers are obvious. Cyber crime and the business interruption that is associated with it are rated as some of the most important risks in the industry today.
“Using Big Data analysis to mitigate against criminal activities refers to the use of analytics software to highlight trends, patterns, anomalies, and exceptions within data. Data analytics will allow insurers to identify fraud before it becomes material, rule out suspicious transactions, and compare data from diverse sources to identify instances of fraud or non-compliance,” said Isaacs.
A clearer picture
As the industry becomes used to technology, the picture about how it will impact the industry becomes a bit clearer. When this occurs, insurers and intermediaries can strategize and figure out what their place in this world will be.
A word of caution needs to be provided here. Insurers and intermediaries cannot sit back and hope for divine intervention or a eureka moment when it comes to technology adoption. Technology is dynamic and will change rapidly; what’s relevant today may not be relevant in a month’s time. Therefore, flexible business models are needed to become the industry’s MVP.
Secondly, technology adoption will require a significant capital investment in infrastructure and skills development. Legacy systems need to be upgraded or cast aside.
The challenges that insurers and intermediaries face should not deter them from the task at hand. Take heart; if the objective at the end of overcoming this hurdle is better customer outcomes, the sacrifice will be worthwhile.
Like former President Nelson Mandela said It always seems impossible until it’s done.
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Article published courtesy of FANews