The AI Revolution in Insurance – NTT Data Consulting Report
Article Synopsis :
Much is being written about robots replacing humans in almost every industry including insurance. To what extent is this true?
In “The AI Revolution in Insurance”, NTT Data starts with the premise that robo-agents won’t likely replace human agents anytime soon. From this perspective, the paper explores the rise of AI, robo-advisers and other automated technologies in insurance and provides a reality check on what AI actually means for carriers, customers, agents, and underwriters.
Advanced technologies such as AI, robotics and Robo-advisers no doubt have huge potential to transform insurance operations but not, per the authors, by replacing human beings. A more meaningful transformation will be achieved by empowering humans to do more in real-time by leveraging AI techniques.
Although AI is a great enabler, consumers still want the human touch — with only 35% saying they have some interest in working with Robo-advisers and only 10% comfortable having a relationship with an online financial adviser.
Amid this reality carriers must plan and invest wisely in these rapidly evolving technologies to capture tangible business benefits. Balancing AI and customer emotion is where it’s at, to which end the authors suggest five swing thoughts:
- View AI as an enhancement not a replacement device.
- Continue using human judgment for critical decision-making.
- Use technology to enable human agents as educators, guiders and confidants in matters of product education.
- Look beyond demographics; complex products will always require human agent support.
- Insurance is about relationships — which only a human agent can actualize.
Where to utilize AI and robo-advisors and where to rely on humans? The paper suggests five questions, the answers to which serve as a useful guide to action:
- Do you really understand your customers? Not just their demographics, but where they are in their lives? What do they need from their insurance? Is it a commodity for them or do they want to be guided?
- Do you understand their end-to-end journey? Automation and self-service can be hugely beneficial, but only if they’re implemented at the right time and in the right context for your customers’ needs.
- Do you understand your agents and underwriters? What do they do that is uniquely human? What tedious tasks are preventing them from focusing on more value-added work?
- Is your data ecosystem in order? Garbage in. Garbage out. Robo-agents and robo-underwriters are only as good as the data they work with.
- Are your products clearly categorized by level of complexity? Understanding which products are geared to self-service versus those requiring the guidance of an agent is essential to understanding and solving the human versus machine conundrum.
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Digital Insurer's Comments‘Flawed’ human beings cannot compete with the perfection of machine intelligence. People are being replaced, resistance is futile, and insurance is next.
Not so fast, and we credit the authors with saying as much. Insurance has always been a relationship business and that won’t change any time soon, if ever. While robots are perfectly logical and linear, human relationships are more multi-dimensional.
AI that assists humans in helping other humans is winning technology; enhancement not replacement the winning strategy.
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