The insurance industry today is facing widespread digital disruption, powered by emerging technologies such as machine learning and artificial intelligence (AI). In fact, an Accenture research has found that the majority of insurers believe that such technologies will transform the industry. With the growing reliance on digital technologies, does that mean we will eventually be replaced? While I doubt the future is going to be a zero-sum game between humans and machines, I believe we can all prepare for a successful future with AI, with these considerations in mind.
Not all insurance processes can or should be automated. Companies should first understand their customer journeys and pain points then look for the right tool to solve their business problem. While there are various AI technologies available in the market, it is crucial that we begin with a defined challenge and the outcome we want to achieve, instead of starting with a “solution” to solve a perceived problem to justify the investment.
By having a clear focus on areas which we should invest in, insurers will be able to develop a more strategic approach and most importantly, one that lasts. Investments in smart technologies do not need to be a grand and costly affair either. With a goal-oriented approach, insurers can start small before scaling up (MSIG has tried that with good success!), as well as experiment with solutions with a ‘fail fast, learn quickly’ mindset before arriving at a solution that works best for their needs.
Invest in people
The keyword that we must remember when thinking about the role of AI and other smart technologies is ‘augment’. Applications of such technology shouldn’t pit humans versus machines but instead, should enable employees to focus their time on higher value-added services. At the same time, effective deployment of new technologies can only be realised when our people are equipped with the right skills to use them.
Talent development strategies such as retraining and upskilling, complemented with essential outsourcing, should go hand-in-hand with your digital rollout. It is likely that intelligent technologies will create new roles requiring collaboration with AI. Insurers will need to think ahead of their business needs to build up a pipeline of digital talents. The pace of technological change is so fast, we will surely need to approach our talent strategies differently.
Build in ethics
As our industry taps on the potential of AI and other smart technologies on an increasing scale, we will need to be equally conscious of using these technologies in a responsible and ethical manner. Because such technologies deal with a huge volume of customers’ data – especially for insurers, this concern is even more poignant. In the pursuit of increasing efficiency, we should be mindful that applications of smart technologies are implemented in a transparent, fair and non-discriminatory manner. The recent Singapore’s model framework for AI governance unveiled at Davos is a nudge in the right direction.
To fully harness the potential of AI, leaders need to create a culture of collaboration and increase synergies across teams. Front and backend offices will need to work together to provide a holistic view of the entire workflow before the process can be evaluated for automation. Insights from the frontline team are also crucial to the AI vendor and digital team to understand what can be improved and where errors can be eliminated.
In addition, insurers will need to forge new partnerships and collaborate more closely than ever with AI vendors, InsurTech startups and even with their peers to complement their own knowledge on the technology. It is likely we will see a hybrid workforce where humans will increasingly work alongside machines.
Insurers who keep the above considerations in mind and adopt an “outside-inside” view of their business have a great chance of succeeding with AI in a balanced and sustainable way.
The article was contributed by Michael Gourlay, CEO, MSIG Insurance (Singapore) Pte. Ltd.