The Economist, in its 11 January 2014 edition, has a really interesting article titled “A cure for the Big Blues – IBM asks Watson to get it growing again”. The article contains a number of important messages for insurers in Asia and we cover them in this short article.
The Economist article examines how IBM, despite its success over the last few years, is struggling to maintain growth and in particular highlights the challenges it is facing from new cloud based service providers.
IBM scored an enormous PR victory in 2011 when it created a super computer, Watson, that beat two Jeopardy! champions in a televised contest that received wide coverage at the time.
IBM’s strategic response to its growth problems has been to convert Watson into a major business division and is investing more than US$100 million to create an independent app developer community using Watson’s expert advice capabilities.It believes the algorithms behind Watson can be deployed to replace many expensive face-to-face knowledge transactions – including those currently delivered by armies of medical and financial specialists.
Lessons for insurers in Asia
The Digital Insurer believes there are four important messages that insurers in Asia can take from this article:
1. Expect the unexpected – we had got used to the fact that computers are better than Chess world champions (Gary Kasparov was the first to lose in 1998) but I think many people were shocked, or at least surprised, to see a computer better quiz knowledge champions which involves mastery of fuzzy logic.
2. Virtual Assistants are going to transform the insurance industry – such is the advances we are seeing I am sure that in in fifteen years Watson’s current capabilities are bound to seem trivial. There is no doubt that intelligent voice assistants will be used to provide a front-line of both customer service and basic financial planning advice as it is very clear that many consumers have a high preference for self-service. Of course there will be a role for people in both of these areas – and the good part is that those people will be prized as professionals and remunerated accordingly. But there will be far fewer people involved.
3. Companies are experimenting already. Watson is not the only example of intelligent virtual assistants (IVA’s). There are a number of offerings available and Care First is an example of work occurring in the health insurance sector in the US on on-line avatars – click here (give it a little time to let the avatar load). I also like this one from outside of the insurance industry (visit Sergeant Star and click on the Ask Sgt Star icon on the top right).
3. Insurers in Asia have a long way to go. The first stage for insurers is to start to systematically collect and collate knowledge on its products and services. When this is done the information can be embedded into customer self-service (FAQs), on-line chat and email responses as well as being a source of data that a voice assistant can use.
The Digital Insurer hopes to spend more time writing about digital customer services and engagement to support face-to-face insurance models in the year ahead. For a high level overview take a look at the article on the Digital Advisor Model.
To read the original article from The Economist article click this link.