The COVID-19 crisis continues to have a significant impact on individuals, society, businesses and the wider economy across the globe. The insurance industry has not escaped its impact, but insurers have responded quickly to the crisis. Deloitte says as the broader economy recovers and responds to the pandemic, insurers will face several challenges but also see many new opportunities in the medium to long term.
Abhishek Sharma, lead for Big Data Transformation at AIA Group, says the insurance industry in Asia-Pacific is focusing on leveraging data and AI to improve customer experiences, streamline processes and increase efficiency.
"This includes modernising legacy data systems, introducing more data-driven initiatives, and promoting a data culture within organisations. In addition to privacy and security remain a top priority, customer-centric solutions such as simplified underwriting products and faster processing times are also important," he concludes.
Evolving customer touchpoints
"Traditionally, insurance has had limited digital customer touchpoints, with customer interactions typically only occurring at the point of sale," notes Sharma. He further opines that advancements in AI and digitalisation have led to higher customer expectations for seamless and personalised services from insurance providers.
To meet these expectations, he explains that AIA is embracing digitalisation and offering health and wellness offerings to help customers live healthier, longer, and better lives. The focus is on engaging customers digitally and providing a similar level of service as digital-native organisations.
"Ultimately, the goal is to serve customers in the most efficient and effective manner possible," says Sharma.
Leveraging AI as a business driver
Sharma also acknowledged that the company's corporate strategy called Ascend200 included a technology uplift called the Technology Digital Analytics initiative. This directed the company's focus on analytics to engage customers with personalised information.
As a further example, Sharma revealed that by 2023, 80% of the insurer's agents in Hong Kong were onboarded using an AI-based recruitment tool. This showcased AIA's commitment to embedding AI solutions into its processes for better customer and agent experiences.
The Swiss Re Institute forecasts a 2.1% return to premium growth in real terms in 2023 and 2024. It says this is supported by a combination of easing inflation, market hardening in property and casualty lines, as well as stronger life insurance demand.
Deloitte lists several technology advances that may likely influence the reshaping of the industry, including a more immersive internet for the enterprise, artificial intelligence, and decentralised architectures and ecosystems. The management consultant also believes that industry players will hit their stride in taming multi-cloud use, mainframe modernisation, and a reimagining of the tech workforce.
Sharma, who is Group Big Data Transformation Leader for AIA, revealed that the insurer has adopted a test-and-learn approach to new technologies like blockchain, Metaverse, and AI.
Over 230 analytics and AI use cases have been embedded into production processes, resulting in faster customer engagement and improved turnaround times.
"While AIA is learning from its adoption of blockchain and Metaverse technologies, the key consideration is whether they make business and customer sense. In the mainstream, AI has already generated widespread benefits in terms of increased revenue and improved customer experiences,"Abhishek Sharma
Acknowledging that AIA's focus on data and AI is primarily to improve customer and agent experiences, he explained that this is achieved through faster customer onboarding, simplified underwriting, digital engagement models, and quick claims reimbursements.
"However, there are challenges with integrating legacy systems, and user experience is a top priority for building these solutions," he conceded. "AIA uses data platforms to integrate AI workloads and our human-centred design teams to offer customer-centric UI/UX propositions."
He cited the example of an AI claim solution in Korea that reduced claim payouts from three days to 25 minutes, showing the transformative potential of data and AI in the insurance industry.
Business metrics that highlight the value of data and analytics
A Gartner survey of insurance CIOs and technology executives suggests that improving the customer experience and operational excellence, not growth is the driving force of most insurance digitalisation initiatives in 2023.
Gartner distinguished VP analyst, Kimberly Harris-Ferrante, says the economic stressors of the coming year are making companies refocus and shift directions to fill gaps which have existed for many years.
At AIA, Sharma says the focus is on key business metrics such as straight-through processing rates, customer satisfaction scores (CSAT), and lead conversion rates.
"Straight-through processing rates are critical for resolving customer queries and issuing policies quickly, while CSAT scores indicate how well our AI solutions contribute to improving customer experiences.
"Lead conversion rates help us to evaluate how well we are matching leads with agents and converting them into sales. Real-time customer service allows us to collect and act on customer feedback quickly. By focusing on these metrics, we ensure that our data and AI solutions are driving business results," explained Sharma.
Advice on modernising data strategy
Sharma lists three:
First, don't wait for a perfect data platform before engaging with business stakeholders. Early engagement is crucial to understanding the business context and value of the solutions. Utilising a test-and-learn approach can help improve these solutions over time.
Second, define key performance indicators (KPIs) to measure the impact of the solutions. Without measuring impact, it's difficult to demonstrate the value of the solutions.
Finally, start as soon as possible, as the AI and analytics space is rapidly evolving. By starting early, organisations can test, learn, and improve over time.
"Additionally, every data and AI solution we implement must have an easy-to-use interface, which we achieve through a human-centred design team that creates seamless digital engagement with our customers," added Sharma.
Click on the PodChat player to hear Sharma details the journey insurers are undertaking as they become data-driven.
- What are some data and AI trends in the life insurance sector in Asia?
- What are some new and emerging customer and business trends that require the repivot of the insurance sector?
- How is AIA leveraging data as the new business driver and resource to transform the traditional life insurance sector in Asia?
- What is AIA’s transformation strategy in today's economic climate and how can the approach recession-proof the business?
- How has the repivot given rise to new data-driven models for the sector e.g., models leveraging AI, metaverse, gamification, blockchain etc?
- What are key business metrics that support how data and AI have benefitted AIA?
- What are the considerations and challenges of setting up and integrating data-driven models at scale into AIA’s business?
- Any advice for organisations looking to transform and modernise their data strategy?