Caspar Herzberg |
This article first appeared in the
Winter 2017 issue of The Record.
Investments in the ‘future of insurance’ are unprecedented, on a global scale. With new players entering the arena, sometimes with quite revolutionary ideas, insurers are under pressure to be part of the story and are making a concerted effort to incorporate new technologies and concepts into their business.
Most companies today aim to provide a sleek digital experience across the board, from receiving a quotation to payment to claim notification, with practically instant service for many of the possible engagement points. Chatbots and cognitive services are being used to cover at least part of the interaction with the customer, for general questions and answers but also for assisting the customer in the quote/policy issuing process, as well as first notice of loss. Some are also utilising image recognition to speed up the sales process, for example producing quotes from a scanned existing policy or the vehicle’s certificate of registration.
Changes to insurance products are driven by the desire to engage with the customer more often and attract the most profitable (less risky) customers in a market segment. Already many of our customers are taking advantage of the ubiquitous mobile app for some form of usage-based coverage, particularly in motor insurance but moving increasingly towards lifestyle-based personal coverage as well. While the majority still do not offer any smart-contract based products, many are planning to do so soon. The future will favour bespoke coverage, allowing customers to select their coverage at a much more granular level (micro policies for a range of situations, mix-and-match coverage) and to proactively affect the premium levels. The internet of things, coupled with artificial intelligence, offers huge potential here.
Cost pressure in the insurance industry is significant and the need to do business more efficiently is ever present. Workplace automation offers the possibility of throughput levels unheard of in the traditional model. Almost all carriers are doing something to automate processes for standard claims, underwriting, and billing and collection.
The core system is at the heart of innovation. It should be future-proof and support the quick and easy introduction of new products, allowing the insurer to leverage a multitude of innovative approaches and technologies without fuss. Being a core system provider is not just about developing cool things and making them operational for our customers, but also being part of an ecosystem so they can pick from what is on offer. Our initiatives include telematics and usage-based insurance, speeding up the sales process with cognitive services and peer-to-peer insurance on the blockchain.
Matej Pfajfar is executive director at Adacta