Microsoft is enabling innovation in insurance

This article was originally published in the Autumn 2019 issue of The Record. Subscribe for FREE here to get the next issues delivered directly to your inbox.

How are insurance firms using the cloud and artificial intelligence (AI) to understand customers’ needs and create personalised experiences?

Amy Stokes-Waters, new business sales executive, Identity Experts: People love to be independent and are increasingly turning to mobile apps for self-service across a range of products, insurance being no exception. Insurance firms are having to invest heavily in cloud technologies to keep up with consumer want for on-demand information and simplified communications in our mobile-first society. Personalised experiences created through AI, from providing clients with reduced pricing based on the driving habits mined via telematics through to deals on home insurance based on previous claim history, are increasingly popular, and this is only the tip of the iceberg.

Wim Geukens, managing director, VeriPark Europe: By its very nature, insurance remains a low-touch industry as most customers only want to interact with their insurers for potential and existing policies or for claims. Nevertheless, insurers that are using AI-powered tools can provide highly personalised and tailored experiences that are relevant to each individual’s situation. By using VeriPark’s Next Best Action solution built on Microsoft cloud technology, insurers can predict and react to specific customer needs and create more meaningful and relevant interactions, especially in stressful moments when filing a claim for instance.

On the other hand, an AI-powered chatbot solution is a great way to provide intelligent, human-like conversations through all digital channels. It enables insurers to deliver personalised services to their ‘always-on’ customers right at their fingertips with an instant chat feature which is available 24/7.

In what ways can these technologies help insurance companies improve risk modelling and regulatory compliance?

Wim Geukens: Given the complex and behavioural nature of risk factors in the insurance business, AI is ideal for predicting risk. The challenge is, there is still a lot of unstructured data and a lot of work being done manually in compliance processes. 

At VeriPark we tap into the power of AI and use advanced analytics to make the risk analysis automatically. We use natural language processing for intent and entity recognition to provide a way for systems to understand customers in their own language from any device, and machine learning (ML) to better understand customer requests and provide natural, near human-level communication.

Phil Fry, vice president Financial Compliance, Verint: The move towards the cloud provides insurance businesses with greater ability to deploy and keep up to date the critical solutions on which they depend. It also comes with the greater flexibility of access to technology and resources, necessary to keep up with today’s ever-changing regulatory environment.

Verint is exploiting AI and related technologies to simplify, modernise and automate the process of helping ensure regulatory and process compliance. ‘Proactive compliance’ capabilities are capable of preventing non-compliant actions from occurring in the first place – whether automating repetitive but often forgotten process steps, or automatically feeding relevant, context-sensitive guidance and knowledge articles to agents. Automatic ‘ethical walls’ can also monitor communications to prevent conflicts of interest and help ensure that other communications and regulatory policies are enforced.

Amy Stokes-Waters: Organisations can now analyse data from wearables, telematics and internet of things (IoT) devices to gain deeper insight into individual risk levels, allowing for more accurate risk modelling based on actual, rather than assumed, behaviours. AI is key to this modelling and reduces operational impact on organisations needing human input into determining risk levels. Leveraging cloud technology allows for this AI functionality to be scalable and means the data can be analysed in real time as required.

What key issues should insurance firms consider when it comes to digital innovation?

Edwin Benson, managing director, EY: In today’s fast-moving, digitally disrupted world, insurance companies face a growing challenge: getting new insurance products to market quickly to meet demand. That’s true for both smaller carriers and larger ones focused on launching new lines of business. It takes an enormous amount of time for an insurer to configure a new product; add it to the company’s policy, billing, claims, and general ledger systems; and begin marketing it to potential customers.

Phil Fry: From a customer experience perspective, digital innovation has the power to impact any customer-facing business and transform it for the better. But it also raises some fundamentally human issues. In order to realise true adoption and results, a transformation in the organisation’s culture must accompany the technology.

If digital innovations are to be deployed to fundamentally change the business, the attitudes and expectations of management and employees must also evolve. Processes and ­decision-making must be optimised to work hand-in-glove with the digital tools and allow the business to properly exploit them. And the customer-facing aspect must be designed from the customer’s perspective. Digital tools and processes must make sense to them too; anything presented in a way that reflects internal thinking or understanding is likely to be a turn-off for customers.

And, we must never lose the human touch. Verint’s own research, Engagement in the Always-on Era, showed that while 54% of consumers are happy to be served by a chatbot, they also always want the option to move the conversation to a human if they choose. The same research, which surveyed 34,000 people in 18 countries, reinforced this by revealing that despite valuing the convenience offered by online self-service the most, the ability to engage with a human is consistently the second preference, ahead of email, social media, video chat and many other digital channels.

Amy Stokes-Waters: Security is a key concern when it comes to digital innovation. Using cloud technologies increases the threat landscape exponentially, so security transformation should feature highly on any organisation’s priority list. End users are increasingly concerned with the safety of their personal data, so protecting it and letting clients know that their information is secure will drive value for any insurance firm.

Wim Geukens: By blending different channels into a single experience, insurers can maximise the value they create through digital innovation. They can bridge the gap between customers and their teams and successfully manage multiple journeys across channels throughout the customer lifecycle. 

The key is to focus on the customers’ end-to-end experience instead of individual touchpoints and unify the Dynamics 365 CRM platform and omnichannel servicing capabilities. By orchestrating the various back-end systems, insurers can avoid broken customer experiences and deliver outstanding unified communications instead.

What makes the combination of Microsoft technologies and partners such a powerful enabler for innovation in insurance firms?

Amy Stokes-Waters: Microsoft’s focus on partner-led engagements means that it can keep its attention on developing great products while enabling partners to drive consumption of those technologies, widening their reach in terms of skills, and allowing partners to leverage additional technologies and provide complete end-to-end solutions for both digital transformation and security.

Wim Geukens: Being in the Microsoft partner ecosystem allows us to get the highest level of support when taking Microsoft’s offerings to insurance companies. In turn, these companies accelerate their digital transformation tremendously.

By collaborating to win with Microsoft, VeriPark brings the full power of new technologies such as AI and ML to insurers in a much easier way. We empower them to provide premium digital experiences to transform customer journeys that were never imagined before and give insurers a perfect chance to impress their customers while differentiating themselves from the competition.

Edwin Benson: The EY Insurance Nexus solution, built on key Microsoft technologies including Azure and Dynamics 365, gives insurers the capabilities they need to quickly and ­cost-effectively bring new products to market – and do so without having to incur the time and cost of building and implementing a new on-premises technology suite.

Phil Fry: Microsoft’s partners have a wealth of expertise and technological capability that complement and augment the power of Microsoft solutions such as Teams. With 25 years’ experience of helping financial services, and other industries, comply with regulatory requirements, Verint recognised the new opportunities for service innovation, enabled by the collaborative environment offered by Teams. At the same time, we were also acutely aware of the gap it opened between those capabilities and the need to comply with increasingly stringent regulations governing communication capture and recording. Working in partnership with Microsoft, Verint has developed the capabilities needed to bridge this gap and ensure that insurance, financial services and other regulated businesses can exploit the power of Microsoft Teams and remain compliant with applicable regulations.

What is the most exciting area of innovation in insurance today?

Wim Geukens: In two words: connected insurance. Connected insurance is reshaping the industry, impacting the whole value chain. New IoT technologies such as connected cars, connected homes and wearables are being adopted by insurers to evolve within an increasingly competitive marketplace. They provide real-time, individualised data to insurers which can be used to offer products that suit their customers’ lifestyles and values, to enhance underwriting decisions and refine pricing.

Our omnichannel delivery solution, VeriChannel, helps insurers unify and enhance customer data collection, using the growing number of devices that are linked as part of IoT technology.

Amy Stokes-Waters: The increased uptake of wearable technology will certainly transform the health insurance industry beyond recognition, with companies such as Vitality already leading the charge. IoT is also set to play a big part in areas such as home and car insurance, providing real-time data about user behaviours to feed into risk-analysis on an individual basis.