Potential for Automated Advisory in Insurance Industry – Accord & Surely
Article Synopsis :
AI driven advisory platforms, so-called robo advisers, are making waves in the financial services industry. Given their early success in wealth management insurers are exploring AI for various insurance processes.
In ”AI – The Potential for Automated Advisory in the Insurance Industry”, ACORD and the Surely Group suggest the time is right for re-intermediation in the insurance marketplace, offering customers a smarter experience through AI-driven robo advice. Focusing on the sales process the paper articulates five possible applications for automated advisors:
- Wealth management platforms, handling the customer’s insurance needs alongside their wealth management needs
- Pure consumer plays, of which several are now emerging, e.g. Sherpa in the UK and Knip in Switzerland
- IFA and Broker networks, who want to offer a wider array of service offerings to their consumers (following a “hybrid” technology & human adviser model)
- Banks, via their online banking platforms or banc assurance operations
- Affinity platforms / large retail brands, who already service a customer in one area and aim to provide additional services creating additional revenue streams
The consumer data obtained from automated advisers offers enormous potential for carriers. Intelligent use of big datasets can help providers:
- Extend and potentially bundle services
- Offer smart comparisons to the consumer, against criteria other than just price. e.g. claims service
- Validate consumer choices, e.g. informing users if amounts insured are considerably higher or lower than peers, inviting a reassessment of needs
- Proactive event-based advisory, e.g. informing users of best practices in preparation for extreme weather events, such as recommending the parking of cars away from trees
- Proactive claims tracking, identifying clusters of illegal and fraudulent events, such as vandalism or ‘cash-for-crash’ accident rings
Artificial Intelligence, not yet mainstream, is nearing ‘business ready.’ Insurers must address AI in the short-term, developing strategy around AI-based services to enhance operational efficiency and customer delight.
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Digital Insurer's CommentsSeemingly far-fetched, the fact is certain knowledge-based roles in the insurance value-chain will be re-defined by AI. The AI technology exists—today—to help carriers deliver more consumer-centric solutions to the marketplace, moving beyond price to advice.
If Google’s AlphaGo can best world champion Lee Se-dol in four of five games of Go, the world’s most complex board game, it stands to reason AI can render useful, possibly superior advice to insurance buyers.
The bots are coming. Given the looming human agent shortage, this isn’t bad news. The risk comes not in using but ignoring them.
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