Using AI for Insurance Customer Engagement
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This month I am privileged to be witness to the launch of AXA’s new connected healthy lifestyle App – Xtra by AXA. It represents a new high-water mark for Insurance in this space. By incorporating the best of what’s gone before and wrapping it in machine learning technology, AXA presents a new kind of customer engagement for the insurance industry.
Behavioural change is a very tricky thing. We humans are so fickle. We see a bright shiny wearable device that can track our every move and we think it’s our “silver bullet”, a “ticket” to achieving our health and fitness dreams. Only for guilt to set in, as after a short time, the wearable device winds up in our top drawer. We knew the fitness data was great, but we really didn’t know what to do with it. The truth is, behaviour change requires much more than data.
Behaviour change is hard work
Many programs have realized the magnitude of the problem and created incentive programs to reward people for being active, so they get a small pay-off on the road to achieving fitness. But in spite of these rewards, the drop-out rate remains problematic.
Still other programs know that being active is only part of the solution. In many cases, diet is a huge contributing factor to conditions such as obesity and diabetes. To combat that, they pepper their web sites with huge amounts of resources, to help members eat “healthy”. Again, the impact is limited.
It’s all too hard and takes too much effort!
Wouldn’t it be nice if we could provide members with their own personal trainer? Someone who knows them intimately and helps them choose the right exercises. Someone who could cheer and encourage them as they progress towards better fitness and health. Someone who could advise them of the right foods to eat and remind them how much sleep they need.
Who could afford to put a program like that together? You’d need thousands of trainers, health experts and dieticians. Wouldn’t you?
The dawn of scalable personal advice
This is exactly the problem that AXA has taken aim at with their “Xtra by AXA” program.
AXA in Hong Kong has partnered with an InsurTech start-up to create a smart chatbot, Alex – a blend of human and computer messaging. Alex engages with program participants in a human-like manner. “He” uses the data shared through over 200 wearable devices / mobile Apps and on-going one-on-one dialogue to achieve intimacy. Alex learns and adapts to make every interaction relevant, meaningful and personal for participants – building engagement just like a real person.
Alex is far more proactive than your regular AI. He can ask questions and make suggestions, rather than waiting for requests. For example, Alex may determine that lack of sleep is a problem for a participant and make appropriate suggestions to help.
Alex can serve up relevant videos or articles based on information requested by a participant. He uses participant feed-back to improve his future recommendations. This contrasts other Lifestyle programs that leave members to search and find relevant content themselves. AXA’s approach makes it easy for participants to get what they want, further boosting stickiness.
Continual interaction is typically required to make lasting behaviour changes. Alex achieves this by setting participants daily personalized challenges to engage and reward activity.
AXA has created an innovative rewards program similar to other Lifestyle programs. However, AXA’s Xtra program differs, in that the rewards will become more personalized overtime. This is achieved by the system learning from participants’ reward choices and their feed-back on each reward they take.
A First Step
Prior to the launch of Xtra by AXA, I was fortunate to have a conversation with the digital innovation and partnership team from AXA. That’s the team responsible for Alex. They highlighted that this was among AXA’s most advanced uses of AI / ML technology anywhere in the world. The Xtra program is a pilot, aimed at an agile cycle of test, learn and improve over the next 6 months.
The AI technology while very advanced, still has human trainers involved. AXA expects the program will begin to reduce the number of human trainers from January 2017 as Alex gains more experience. The ultimate aim is to make the personal coaching that Alex provides, truly scalable with very little human intervention.
A key test of Alex and the Xtra program will be the speed of adoption and the stickiness it generates. In part, its success will rest on how human-like Alex is perceived by participants and their willingness to invite others to join the program. The program does give incentives for participants to introduce their friends and colleagues to the program, but I suspect this will only occur if Alex presents a positive and valuable experience.
Another fascinating aspect to the Xtra program, is that AXA has used it to internally rally and engage staff on a digital transformation of its own operations. As many readers will understand, becoming “Digital” is much more than Apps and technology. Transformation of the supporting processes and mindset of staff is critical to fulfilling the digital promise to customers. I am looking forward to bringing this story about AXA’s program to you in a future column.
Being Digital for Good
I have written and spoken elsewhere about digital innovations based on connected insurance. I’ve characterized Level 1 as simply using data to provide discounts for customers. Level 2 is where the data is used to create free value-added services for customers on top of discounts. Level 3 is where the engagement effect of free value added services is used to engage non-customers, with the aim of converting them to customers in the future. Metromile, the telematics motor insurer in the US, is an example of this Level 3 approach. Now I’m pleased to have an example closer to home with this Xtra by AXA program. AXA, for the next 6 months, plans to make the App (and Alex) available to everyone in Hong Kong for free via the App Store and Google play.
Another key feature I’ve highlighted in other digital insurance programs is the ability to positively influence and manage risk. Probably the best example of this is AllLife in South Africa, where strict management of the chronic disease is part of the policy coverage terms. As the CEO Ross Beerman says, “Our customers get better, just by being our customers”. Again AXA’s program is ticking this box. From early 2017, Alex will support participants diagnosed with high risk type 2 diabetes, through a free 4-month risk reduction program.
The bottom line
I will be watching this experiment by AXA in Hong Kong with great interest. It incorporates some of the best aspects of InsurTech – partnering for agility, using AI in a front-line / customer facing capacity, digital engagement, behaviour modification, wearable data, etc. Additionally, it’s launching into a fast moving, competitive market where several other major players have already launched Lifestyle insurance programs. What better way to prove the competitive benefit of AI technology for insurance engagement? If it lives up to the promise, then we will remember this day as the dawn of a revolutionary new way for insurers to proactively engage with the community. Let the games begin.
Psst, Alex, let me know when you are ready to take orders for McDonalds 😉
Many thanks to the AXA Lab team and the digital and innovation team at AXA Hong Kong, for giving The Digital Insurer advanced access to your program. Full disclosure: I presently have no financial or other interest in AXA. However, I do love seeing the ideas I’ve written about, come to life for the good of the insurance industry.
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Andrew Dart is an Insurance thought leader, telematics practitioner and editor of “Insurance Connected” monthly column for The Digital Insurer.