4 things insurers should keep in mind when embracing new technologies

Property & casualty insurers continue to make significant investments in both foundational and emerging technologies and are seeing significant operational efficiencies achieved in the middle and back offices as a result. While these efficiencies should be lauded, P&C insurers should keep their eyes on the real prize: using technology to enhance customer relationships and boost growth.

Oxford Economics and Accenture recently surveyed global insurance technology executives (chief technology officers, chief information officers and vice presidents) to better understand how technology is remaking the insurance industry. The results revealed that insurers expect their technology focus to shift from cost reduction towards developing customer-facing applications that boost growth, as well as customer satisfaction and engagement.

Presently, insurers are embracing digital transformation to create operational efficiencies. Sixty-three percent of insurance executives say cloud-based technologies that improve their efficiency are one of the innovations that are creating the biggest business impact today. When projecting three years out, the technologies among respondents that will make the greatest impact are customer-facing blockchain (53%) and artificial-intelligence-based technologies to improve client-facing processes (47%).

The shift in the use of artificial intelligence (AI) is especially striking. Today, 60% of insurers surveyed are investing in AI to improve operational processes, but in three years — when the technology will have matured considerably — half will be investing in AI to improve client-facing processes. We are already seeing this with the use of AI to help call-center agents in customer conversations by recognizing cues in the customer’s voice (tone, pace, silence) through natural language interactive voice response and giving the agents suggestions for adjusting the script or routing calls to alternative self-service channels.

Related: 5 trends to watch in insurance AI and robotic process automation

Take action and transform your organization

Consumers clearly want their P&C insurer to up their game. A recent Accenture survey of 47,000 insurance customers revealed that more than half expressed an appetite for a true omnichannel insurance experience, which would allow them to switch seamlessly between physical and digital channels. And nearly six in 10 consumers would be willing to share significant personal information, such as location data and lifestyle information, with their insurer in exchange for lower pricing on products and services. P&C insurers will need to rely on AI, data and analytics to make these more personalized policies a reality.

As insurers continue to embrace new technologies and transform their organizations they should keep the following action points in mind:

• Don’t overlook your workforce: Before undertaking any major investments in new technologies or making any major changes, insurers should take a close look at their workforce. Do they have the right skills to seize full value from the technology portfolio? Is the workforce ready for the rapid pace of technological change? Can the company attract and retain people who will use new technologies to gain a competitive edge? Is it enabling cross-discipline teams to thrive in a culture of iterative development, entrusting them with budgets to make decisions on behalf of the customer at pace?
• Consider the ecosystem opportunities: Insurers should conduct a thorough review of their applications to determine which alliances, partners, and vendors should be integrated into their ecosystem, actively identifying savings opportunities and operational efficiencies, while extending or integrating new business capabilities.
• Integrate legacy and new systems: Transitioning completely from existing mainframes and other legacy technology will often be impossible, as these are typically deeply embedded in an organization. Insurance companies are strongly advised to make the seamless integration of old and new systems a priority through digital decoupling as they migrate to more innovative and powerful technologies.
• Remember that data veracity remains key: Data drives the digital insurance business and insurers need to have data they can trust. As carriers draw increasingly on new external data sources, a strong focus on data veracity, data architecture and data governance can underpin their digital transformation.

These actions can help insurance companies capture the benefits and opportunities of new intelligent platforms and technologies. They will also increase the likelihood that insurers can use technology to enhance the customer experience and boost growth.

Related: Experience is key to customer retention for insurers

Jim Bramblet is the North America insurance practice lead at Accenture. He can be contacted through the Accenture website.