How Microsoft solutions are changing the game for insurers

How Microsoft solutions are changing the game for insurers

Firms are using the cloud to manage risk, increase efficiency and enhance the customer experience

Elly Yates-Roberts |

This article was originally published in the Summer 2018 issue of The Record. 

In a world of rapid technology innovation, seamless engagement across web, mobile and social media has transformed the way people connect socially, professionally and as consumers. This rich mix of digital engagement yields volumes of valuable data for businesses, while driving ever-higher consumer expectations for a faster, slicker and more personalised customer experience. Insurance companies are leveraging the cloud to gain the insights and efficiency they need for success in an increasingly dynamic industry.

“Insurance firms know they need to make every aspect of their business more ­customer-centric to attract and keep customers,” says Dennis Vanderlip, director of worldwide financial services at Microsoft. “They understand the value of good data, and they know they need fast, deep and accurate insights if they’re going to deliver timely products that meet customers’ needs. As they look to compete successfully in this environment, insurers are taking advantage of the cloud in three key areas: risk modelling, core systems in the cloud and customer experience management.”

Today’s global risk and regulatory environment has brought increased demand for risk modelling and driven insurance firms to look beyond on-premise compute capability for the compute power they need for actuarial and catastrophic workloads. “Insurers face a fast-moving risk landscape in which they need to manage growing quantities of data and complex parallel computations – with time-critical spikes in demand often exceeding available on-premise compute power,” explains Vanderlip. “By moving actuarial and catastrophic risk modelling workloads to the cloud, insurers are empowering the business with faster real-time insight into risk exposure.”

Munich Re, a pioneer in risk models to simulate possible natural disasters, exemplifies the power of the cloud in a data-driven business. The company is testing Microsoft Azure to enable deep and comprehensive analysis of huge volumes of data. With the help of in-memory processing, it has reduced the time it takes to calculate weather and climate data scenarios. Data has become a strategic success factor for Munich Re, as the capability for increasing data analyses and ­collaboration enable it to better understand climate change and provide support to help minimise risk and build resilience to disasters.

Insurers are also gaining strategic benefits by moving their core systems to the cloud. “Moving core systems to the cloud enables insurers to respond to market changes with new products and services,” says Vanderlip. “It also improves time to market for those new products and services because carriers can develop, test and deploy new technology in the cloud much quicker. At the same time, it reduces costs.”

It’s a principle that has been put into practice by direct auto insurer GEICO. By adopting a DevOps strategy that unifies development with operations, and moving its product development to Microsoft Azure, the company has enabled more personal and dynamic engagement with customers. Moving to the cloud has empowered it to increase efficiency, improve application availability and lower costs – all essential elements for success in the fast-moving digital insurance marketplace.

With customer-centricity top of the agenda, insurers have also been quick to grasp the cloud’s potential in customer-facing roles, and they’re harnessing sophisticated artificial intelligence tools to make a big impact. “Insurance carriers are investing in bots, cognitive services and machine learning to enhance the customer experience,” says Vanderlip. “Research by Celent shows that 20% have already invested in machine learning and 35% have invested in bots or will do soon. More than half of insurance firms either have or are considering investment in sentiment analysis tools, too.”

The burgeoning popularity of bots in this industry is not surprising, given the benefits insurers are seeing. “Bots enable insurance carriers to follow the customer, to meet each customer wherever they are online rather than only on insurance websites,” says Vanderlip. “That’s especially important given that insurance customers rarely download insurance carrier apps – they want to engage using their channels of choice. Bots also help to reduce costs by allowing insurers to shift less complex enquiries and transactions to automated channels. These technologies are ideal for engaging with a new generation of customers who want immediate answers and information.”

Flo, the conversational chatbot created by auto insurance provider Progressive, shows how bot technology can add a new dimension to the customer experience. Built using Microsoft Azure Bot Service and Cognitive Services, Flo engages with customers through Facebook Messenger and its own Facebook page – where the chatbot’s millions of followers prove its popularity. Flo has become more than just a robot: designed with a distinct persona, this bot has become an iconic spokesperson for the company, answering customer questions, providing quotes, and even offering witty banter.

“Bots’ capabilities for human-like interaction enable insurers to deepen customer engagement through natural and personalised conversations at scale,” says Vanderlip. “Bots can uncover new insights by reasoning over new customer interaction data. And because bots enable more efficient business processes, employees are free to focus on handling more complex queries and creating personalised products and services that really enhance the customer experience and bring value to the business.”

As insurance firms look to the future, the cloud is already proving essential to gaining a competitive edge. “The elastic capacity of the cloud, combined with the capabilities of advanced analytics, artificial intelligence and machine learning technologies, gives insurers the tools they need to innovate, engage and respond to the changing expectations of customers, employees and regulators,” says Vanderlip. “These tools and technologies are transforming the industry today, and empowering insurance businesses to deliver the experiences that will set them apart in the future.”


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