Engineering competitive advantages through AI, ML & IoT
by Scott QuianaMr. Quiana is Head of Products, Marketing & Partnerships at Quantemplate Inc., an insurance data-integration, automation and analytics firm. Visit www.quantemplate.com
Many industries around the world that have incorporated emerging technologies such as artificial intelligence (AI) and machine learning (ML) to the internet of things (IoT) into their business models are already seeing significant benefits across many facets of their business. Emerging technologies are reshaping how we work, directly impacting global industries like real estate, retail, transportation, pharma, and others by simplifying operations and enabling growth.
These technologies are gradually making their way into the insurance market. Yet they are faced with hesitation from decision-makers who continue to evaluate whether the benefits extend into their complex operations. These solutions will play a critical role in increasing operational efficiency, ensuring company growth, profitability, and stability by unlocking the true potential and value of data.
Creating Competitive Advantage
When it comes to data, there is a desire to enable automation, streamline efficiency, and access comprehensive analytics fed by this data, something that emerging technologies are capable of achieving. Companies that accept and transition to these new capabilities will create a competitive advantage as they experience increased access to new data elements and sources. Using these new data elements, companies can offer dynamic and flexible products, based on the current economic conditions and personal life events, better positioning themselves as a leader in the market.
For the insurance industry… how long must we wait?
The underlying question is, how long will it take for data processing automation to become the standard for life and health companies? We’ve already seen more than a quarter of U.S. life insurers expand their automated processes – many expanding their online presence and digital footprint as part of the application process. While some companies have creatively found ways to implement emerging technologies and create efficiencies, others are spending an incredible amount of time and money utilizing manual resources.
As an example, one company reportedly spent 18,000 man-hours a year evaluating an average of 10% to 20% of submissions they received annually. The remaining 80%, which represents potential growth to the business, remained untouched and a potentially significant opportunity lost. To change these circumstances, companies need to adjust their view of data and technology to look at both critical components for future success.
Using ML and cloud-technology to ease the process
L&H companies, now more than ever, are under pressure to achieve growth and underwriting profitability. Companies need to be open to incorporate emerging technologies to make the magnitude of changes required to see the significant increase in operational efficiency.
The first step achieving this is to focus on the data as it enters the organization. Traditionally the policy purchasing process in the L&H market is slow and takes a lot of time for customers to obtain quotes. By using emerging technologies, companies will have the capability to cut down the time to turn around quotes, expensive medical examinations, improving the customer experience, and dramatically reducing margin pressures.
Viewing data as an asset, not just as an expense
Data is often treated as a cost center, leaving companies in a position where they have difficulty operating efficiently with high operating expense ratios. Based on the value data can bring to an organization, it needs to be treated as an asset as data enters an organization. Many companies are burdened by cost and capacity restrictions and fail to see how investment in this space can result in business growth.
Advancements in ML, AI, and RPA can help automate processes and take advantage of third-party data providers enabling forms to be pre-filled to meet customer demands for a more convenient quoting and buying experience. Implementations like these allow an order of magnitude improvement in operations capturing the necessary data to perform accurate risk assessments, reducing quote time, and meeting customer demands for a better experience.
Looking ahead to the future of the financial services
The market is poised to undergo a shift over the next few years, one which has been further fueled by the current COVID-19 pandemic. As we continue to see growth in the use of emerging technology in the industry, the L&H sector will be able to extract real-time and accurate data on the individual consumers, which in turn will help them proactively respond with timely and highly personalized interventions.
By automating data processing, ML maintains data integrity for all components of the insurance process, including modeling and pricing, performance analysis, and data preparation. What has proved to be a catalyst in the industry, emerging technologies can change the way insurers operate and provide them the opportunity to gain an advantage on competitors with better pricing and a faster pace to market, making them an industry leader, setting standards for others to follow.
L&H companies are continuing to open their minds to change, they see the value of what data can offer and the direct impact on the growth and profitability of the business. ML has opened the door to the future of automation in the insurance industry, and those who chose to act will reap the benefits.