What’s on the Horizon for Technology?
It is an exciting time for technology, but with the hype growing we must be patient and pragmatic as Rob Smale, Non-Executive Director and Business Advisor, reminds us during his interview with Modern Insurance. Throughout our interview, Rob explores Artificial Intelligence and what everyone within the value chain is looking for in terms of technology as we enter a new decade of insurance.
Q. You have worked with Artificial Intelligence (AI) for several years. Please can you share your experiences so far of AI within the industry, and what we can expect from this technology as it continues to develop.
A. I first came across some of the initial AI technology nearly ten years ago, eventually ending up implementing Tractable into Ageas, where it was used in the motor claims area, specifically in the back office of the engineering function. We chose Tractable from several AI products because it was designed for the back office rather than being customer-facing. At the time we felt that too much of the new technology was concentrated upon the FNOL segment of the claim.
When I moved roles within Ageas, we did a study about what was available in terms of AI, RPA etc, and those technologies that operated in the back office seemed to offer, in what were those early days, the best route to fully exploit the opportunities we saw coming from artificial intelligence. We surmised that to simply use it to flatten and streamline a few processes would be a very short-term gain and what I was looking for was something much longer-term; we needed to see how company structures could be changed in order to exploit this new technology rather than simply layering it on.
Q. How do you see AI and other emerging technologies transforming the current processes within insurance?
A. There are some great opportunities to smooth and streamline current processes because many are now clunky after years of evolution and development. The winners in the race to exploit technology in terms of artificial intelligence would be those companies that are prepared to completely redesign what they do. A lot of people are talking about job cuts when it comes to emerging technologies, but I see AI augmenting staff and taking some of that mechanistic grind away from people and allowing them to be more human in the way that they approach their role. AI and robotics will allow the people within insurance companies to act in the interest of the customer much more often and consistently, rather than just guiding the claim on its “prescripted” journey.
Q. What would you say insurers are looking for in terms of technology?
A. We must be quite pragmatic as an industry, and whereas we might like to chuck all our existing technology out of the window and start again, that isn’t going to happen. Emerging technology must slot into the technology that we have already got. It must be able to be deployed relatively quickly and painlessly because of the pressures on insurers IT programmes and for example, the cost pressures mounting in the motor arena – there must be a degree of pragmatism about how much it costs to deploy as insurers are looking at quite a surge of costs.
Q. How is technology influencing customer’s buying habits? And how can insurers utilise this to their advantage?
A. To some extent, you don’t know whether technology is influencing customers’ buying habits out of choice, of whether customers are being forced down a route. If you think about insurance in the 90s, call centres were introduced, but the customer didn’t demand that and the customer didn’t have a choice whether to use the service or not, but they were eventually happy to go with it because they saw benefits despite the poor deployment of the technology at the time and since.
To some extent you don’t know whether technology is influencing customers buying habits out of choice, of whether customers are being forced down a route.
Some of the new technology may open the possibility for new products to come along, but insurance products have essentially not changed. We’ve seen changes in their method of delivery and servicing but the fundamental product has changed little. If new products do emerge it will be interesting to see whether the customer buys those products and takes the time to understand them.
Q. Would you say that insurance is shifting to a state of prediction and prevention, rather than detect and repair?
A. I don’t think it is shifting, but I think that it has ambitions to shift. But we are a long way from that, mainly because the technology and understanding of predictive technology is in its infancy, as is the availability of data.
We are still very much in the detect and repair realm and we will be for quite a while yet until customers accept some of this technology more readily into their homes like they already have started to in their vehicles.
Q. How has your experience as a Transformation Director framed your approach to technology and innovation now?
A. As a Transformation Director and as a Claims Director, I was interested to keep abreast of what technology and innovation was out there and keen to try it when I thought there was an opportunity. I did come across a lot of technology and potential innovation that I thought was solving a problem that I didn’t necessarily have, and I also thought that some of it was aimed at the wrong end of the process.
When I was Transformation Director, I looked at some of our internal processes in the industry and I saw a lot of customer-facing processes, although not perfect and a bit clunky, they were pretty good. Many of the issues that customers get within their claim’s journey were caused by the back-office by existing processes and technology not connecting with the innovations and processes at the front end. One of the things I learnt as Transformation Director was that there needed to be a lot of work put into insurer’s back offices to ensure that they can keep up with the advances in processes and technology being deployed at the customer-facing end.
Q. What tech trends do you think will define the future of insurance?
A. AI will allow some of the other technologies that have been bubbling under for the last decade to really start to be exploited. For example, video technology and dash-cam video links, these technologies will have a massive impact of reducing fraud and enable insurers to better understand the problem, the customer’s predicament and allow the insurer to deploy the right assets and resources.
Customers are reluctant to buy and use technology whose sole purpose is monitoring their homes. To overcome this big hurdle that we face will be overcome in the medium term by finding ways of piggybacking onto other technologies that the customer is already using and values in their lives, because this will then enable the start of benefit realisation to both the insurer and the customer.
Q. As we are about to enter a new decade, what do you predict for insurance in 2030 regarding technology?
A. I think that the frequency of claims will reduce significantly especially within motor. But there is going to be an interesting transition period in the meantime as new cars are released with the new technology. We might see more autonomous driving and I think there is a big issue there about whether customers truly understand the different levels of autonomy.
In the home space I think it will depend on the willingness of customers to embrace technology.
Customers’ attitudes to technology may have to change a lot.
Customers’ attitudes to technology may have to change a lot.
Q. What is your favourite aspect of technology and what it can do for its user?
A. In the answer to this question, I will change the word user to claims handler. I think technology is going to augment claims handlers and give a lot more freedom to them so that they can better understand what is happening to the customer and deploy the next best action on the claim. It will allow claims handlers to be a lot more imaginative and create bespoke the journeys, while enabling the job to be much more rewarding.
Rob Smale is a Non-Executive Director and advisor.