Safeguarding the future by increasing insurance business resilience

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Are insurance businesses ready for AI?

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COVID-19 brought a year that none of us expected. We were placed in a tough spot, but we were also led to review our business processes and open the doors to change.

While reviewing what changes needed to be made, many companies identified artificial intelligence (AI) as being a key element for business resiliency and continuity. McKinsey’s 2020 Global Survey on AI showed that 50% of the respondent companies have already adopted AI in at least one business function.

This is not without strong cause. AI has the power to create long-term organizational and economic benefits. But, on the road to adopting AI and creating those benefits, there are both challenges and opportunities. Let’s examine both of these. An honest review of these will help you to discern- is your business truly ready for AI?

Two sides of the AI coin

Blindly plunging into adopting AI is not a wise decision. It is important to analyse processes and identify opportunities as well as get to know possible roadblocks so that in the long run, AI doesn’t create technical debt for your operations.

Here’s the sunny side up of AI:

  1. Reduces costs

    According to McKinsey’s Global AI Survey 2019, 44% of surveyed executives said that AI had reduced costs. This is to be expected since having a system that is capable of completing the tasks of three potential employees (as an example) guarantees cost reduction and savings. Other ways in which cost reduction manifests is the reduced spending on maintaining old legacy systems and eliminating recurring tech issues which might call for extra pairs of hands.

  2. Saves time

    Automation can free back offices from simple but time-consuming tasks. Manual data entry and form filling is one task. It is a redundant one that can be automated, thus allowing employees to focus on more complex, creative ones. Without factors like human distraction, the task would also be completed quicker. If having a human is necessary, then employees can be brought in the loop at the end for a review.

  3. Unlocks personalisation

    AI has the power to move away from one-size-fits-all customer interactions e.g. web forms that aren’t flexible and don’t take customer preferences into account. On the other hand, chatbots enable better customer services through personalisation of customer experience. An example is the tailoring of the conversation tone according to customer segments, similar to what some call centre agents do. And again, static webforms don’t allow for these personalisations.

  4. Improves communication

    Chatbots allow wider and improved access to services through a 24/7/365 availability. Customers no longer need to wait for an employee to reach the office at 9 AM and have their query answered. With an in-house chatbot service, for example, a global pool of customers can be served as per their convenience. Internally, when employees don’t have to compromise with their well-being to attend to customer requests, they’ll also perform better.

    At the same time, AI comes with the following challenges which will need to be tactically solved even as the benefits continue to be reaped:

  5. The evaluation of the impact

    Although AI has been the talk of the town during the last decade, there is still a limited understanding among decision-makers of the benefit it could bring. Even when clarity is gained, the lack of a dedicated data and automation strategy for implementation prevents those benefits from materializing into reality. In addition, companies have no clear metrics and KPIs set up once AI is in place. That renders its benefits null.

  6. Enabling transformation

    For companies, it is not enough to innovate. They need to transform. Transformation means translating research findings into commercial products- something companies struggle with especially the first time around. You’ll know a transformation is in place when revenue is enhanced and costs are reduced. It is a process that takes time. Innovation is an inspired investigation that produces a feasibility study at most.

  7. Embracing a new mentality

    Many insurance companies are facing cultural barriers and are struggling to challenge the status quo within their walls. You might find building the technology easier than convincing people to wholeheartedly adopt it. From experienced company adopters, it is not enough to simply train and explain. It is also important to bring in people who are experts in AI to help the entire organization transition. A strong partnership strategy is the starting point for long-term AI fluency and literacy in the company.

  8. Evolving technology

    Many insurance companies still rely on legacy systems and have data silos issues that consume a lot of effort to keep running. Because these systems are still the status quo and employees don’t need retraining for them, they are hard to let go of. But, the present technological landscape is only constant in the number of changes it undergoes. Even after adopting AI, companies will constantly need to shift things as more feedback is gathered. A new kind of resiliency and flexibility will need to be practiced at the organizational level.

Bringing the vision to life

Business transformation starts with an honest review of business processes- just like the one that COVID-19 led us to carry out. The next step is gaining a holistic understanding of the changes we intend to implement and the final step is to team up with an experienced partner who can enable the execution of those changes while providing support and guidance along the way. High-performing businesses have completed all the above steps and increased their investment in AI despite the pandemic.

If you, on the other hand, have completed the first two steps, it’s time now to embark upon the final one. Read what a partnership with Spixii consists of and then contact us to start bringing your vision to life.

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