Last week we attended Reuter’s Events: “Insurance AI & Innovative Tech” which included hundreds of experienced insurance executives in addition to thousands of other insurance professionals. The event was jam-packed with informative keynotes, live Q&As, and fireside chats that spanned over 3 days. Knowing not everyone who wanted to attend could, we figured we’d give a quick SparkNotes of some of the major themes you missed.
There were two main themes that continued to stick out:
- The importance of putting the customer first and offering an exceptional digital customer experience.
- The need to leverage data & AI to drive innovation within the industry.
If you know anything about ForMotiv, you can probably see why we were so excited about this event, but I digress…
Countless speakers mentioned the impact of COVID and how insurers have risen to the challenge and accelerated 3-5 years’ worth of innovation & digital transformation in just 18 months.
However, that’s just the beginning of the new, digital-first insurance world that all of us will be accustomed to in the coming years.
Theme 1: Personalized Digital Experience
On the customer experience front, speakers repeatedly stressed the importance of understanding your customer’s wants and needs, understanding their intent, and providing products and experiences that meet their expectations. The challenge is finding the right data sources to help inform these decisions. Building these strategies and capabilities in-house can be a daunting task, which is why some carriers have chosen to work with vendors that help them gather this data and take action on it.
Emi Zambada, AVP of Analytics at Nationwide, said “It’s all about speed when it comes to new data sources & AI strategies to improve our customer experience. We’d rather work with an external company who can provide these solutions quickly than use up internal resources to build certain capabilities in-house when we should be focused on insurance.”
While speed is important when implementing new tools/strategies to help improve the customer experience, aligning business objectives with data capabilities is also crucial. Don Vu, the Chief Data Officer at Northwestern Mutual, shared that one of their biggest business objectives is to improve their customer experience by reducing their life insurance approval times from 28 days down to just 2 days.
To do this, they have to leverage data, technology, and digitization to improve the underwriting process which will allow them to offer a better customer experience. Don said the key to success was “…driving underwriting innovation through new data sources.” The combination of modernizing their platforms, putting the customer first and aligning their business objectives with the data they had available allowed them to successfully improve that customer experience by reducing their life policy approval time by over 10x.
Personally, my favorite quote was from Rose Hall, AXA XL, who, when speaking about their reinsurance customers, said, “They don’t want to buy technology solutions from us. We’re not a technology company. They want to and will buy technology solutions from tech companies.”
Preach! We’ve discussed this before and couldn’t agree more.
Theme 2: New Data Sources
The second theme was all about using new data sources and AI to drive innovation for large insurers. The days of waiting for a fluid test for a life policy or waiting weeks for a claim payout are over – it’s 2021 and people want things instantly.
But how can carriers provide these instant experiences without exposing themselves to dangerous amounts of risk? By leveraging new data sets and AI tools, that’s how.
Brent Hammer, the Head of Innovation at Grange Insurance, said he & his team have nailed down a process to find these new data sets and new AI tools that give Grange the edge when it comes to innovation. They have a three-phase system that they follow: gain as many access points to the InsurTech ecosystem as possible, identify internal business problems that Grange is trying to solve, and then actively work with InsurTechs in their network who can help solve those business problems. Most of these solutions involve new data sets or some form of AI. Brent said the key to success is starting small.
“Once you see a lightbulb go off in the room & key business leaders start coming back to you asking for solutions, you know you’ve found success.” – Brent Hammer, Grange Insurance
In another conversation around the future of Data & Analytics for insurance, JinJie Duan, Head of Personal Lines Data Science at Farmers, had a really interesting point about new data sources. He said, “Who’s going to find the next predictive variable for personalized insurance that nobody has used before? That’s going to be what separates you from your competitors.”
As it stands today, carriers are using historical data sources such as Google Analytics, heat-mapping, and session replay tools that give you an idea of how your campaigns are converting and where customers struggled during the application process. Then they have the basic 3rd party credit and risk data from the Experian and Equifax of the world that occur after the submittal process to try to mitigate risk. But there is a huge hole missing which is how the user is behaving during the application.
Ten years ago, if a customer was confused, you would be sitting in front of them, see they were confused, walk around the desk and help them out. But today, in the “faceless” digital world we live in, you are completely blind to any of these obvious behavioral cues.
That’s the problem we set out to solve. ForMotiv invented a way to accurately predict a user’s intent by analyzing their digital body language while they actively fill out digital applications. But we didn’t stop there. Instead of simply passing an intent score to our carrier customers – we developed a way to enable them to take smart actions and adapt their digital experiences in real-time as a user is still in the app to nudge the desired outcome, just like they would in person. By humanizing digital experiences with real-time smart actions, we help increase conversions by removing friction or adding contextual help if a user is showing signs of confusion or frustration, while simultaneously reducing risk and fraud by adding friction or triaging applications that need further qualification.
Let’s leave static user experiences and reactive user analysis in 2020, the future is next-generation dynamic experiences powered by ForMotiv.