Capitalizing on AI requires customer focus

INSURERS have to work on their existing set-ups before they can begin to enjoy the potential benefits of artificial intelligence, a new report says.

“For new propositions to succeed, they have to genuinely improve customers’ lives,” U.K.-based analyst and event organizer Insurance Nexus says in a report titled ‘Driving Value From AI in Insurance.’

Insurers, it says, increasingly need to show they are proactive in keeping their customers safe.

And not just from a claims standpoint.

“The competitive marketplace means customers want more for their insurance premium than help in a claim,” the report says.

It says one example of AI being used to build a preventative insurer-customer relationship is U.S. insurer Liberty Mutual’s ‘Cat Eye’ mobile app.

The app uses AI to predict weather events and combines predictions with information about customers’ property to help them mobilize in real time. It can provide personalized hurricane alerts but also aggregate information to discover where there is concentrated claims information.

It also helps Liberty Mutual engage adjusters on the ground so recovery starts in hours rather than days.

“You have the ability to build an intelligence capability to be needs-based and design the right products,” said Fernando Moreira, senior VP, global insurance, at Scotiabank.

“My first priority is always growth and customer experience. They are two sides of the same coin.

“The second priority is how you take proper business decisions and relate it to aspects of risk, trends or underwriting.

“You have to prioritize where to apply capability first.”

Mr. Moreira said insurers are reorganizing their businesses in terms of how they deal with data — not just as part of an IT task but as part of the entire organization.

“Whether it is for solving complex business problems or addressing growth opportunities, we need to understand what sort of proposition we should be offering our customers,” he said in the report

“Even if carriers feel the problem that they need to solve is not immediately obvious, there is a compulsion to at least begin embedding AI capabilities, if not fully-formed solutions.

“Today, if you’re not considering building a robust analytics and AI ‘brain’ that helps your business operate in real-time, you’re going to be out of contention in this competitive market.”

He said the insurance industry will be demanding real-time decisions and that means having intelligence at your fingertips all the time.

“Not at the end of the day or the week or the month,” Mr. Moreira said.

The report says AI in Canadian insurance is very much in its infancy, although there is a “healthy community of innovators that carriers are keen to tap into” and a number of large organizations have been looking for ways to incubate their own AI specialists.

For example, the report says, Intact Financial announced a partnership with Université Laval in January that will see the company sponsor two research chairs focusing on AI and actuarial science.

“This is vital because insurance executives acknowledge the success of AI depends on the available talent — and they feel this is currently in short supply.”

The report cites figures from Montreal-based firm Element AI that show there were roughly 20,000 AI experts around the world in 2018.

If they all turned up in Canada, they would all be needed, the report says.

And so would every student graduating in AI from university.

“AI is not built by technology, it’s built by people who know how to find the right technology,” Mr. Moreira said.

“It’s not cheap. You have to invest to pay for the right people. They are very in demand.”

The report was published in advance of the fifth annual Connected Insurance Canada conference, which will be held Sept. 10 and 11 at the Toronto Marriott Downtown Eaton Centre hotel.

Conference program and registration information is available at

The organizers are offering $100 off of the registration fee with the code ‘5062TWIN100.’

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