Is this the way insurers should adopt AI?

Is this the way insurers should adopt AI? | Insurance Business Australia

Technology

Is this the way insurers should adopt AI?

“Imagine how amazing it would be,” says Hollard leader

Technology

By
Daniel Wood

Artificial intelligence (AI) presents insurance firms with the possibility of putting massive amounts of data to optimal use. Some insurance leaders are embracing the opportunity, confidently investing in AI. A recent KPMG report found that nearly 60% of insurance CEOs surveyed expected financial returns on AI investments within three to five years.

However, significant questions remain, including where exactly to invest. There are also some reservations about AI’s threat to insurance jobs.

Suzi Leung (pictured above), chief commercial officer for Hollard Insurance (Hollard), is moderating an insurance-focused AI panel at the summit. The discussion will include exploring successful AI use cases across insurance disciplines, an overview of ethical issues and potential AI pitfalls.

Leung told Insurance Business that, at this early stage of adoption, her firm is approaching AI very differently depending on whether its use is internally with staff or externally with customers.

Looking ahead, Leung was able to articulate an engaging picture of where AI could transform insurance, including the relationship between insurer and customer.

“When I think about insurance customers, where I see AI really helping, is as a way of reducing customers’ cognitive load,” she said. “For example, if my home was flooded and the insurer knows that and has the data to support it because of data showing that a big cyclone ripped through.”

The Hollard CFO said anyone in this situation needs to prioritise “very basic needs.”

“It’s Maslow’s hierarchy – so the very basic needs of making sure my family and I are safe, making sure that we have somewhere to stay and have food and support,” she said.

However, the way insurance traditionally works, she said, obliges all of us to also be focused on filing an insurance claim.

“You do not necessarily want to be lodging a claim at that point, spending time on a phone, calling your insurer, or anything like that at all,” said Leung.

AI, she suggested, could totally change this situation and enable the insurer to be much more proactive.

“Imagine how amazing it would be if your insurer could send you a text message and say, ‘We know that your home has been impacted by the recent floods. Here is your claim number. We’ve already lodged a claim for you. You’ve got temporary accommodation’,” she said.

Leung said AI could remove this claims pressure on the customer and instead provide a way for the insurer to provide proactive customer service.

“How does the insurer flip the need of the customer to contact us first to lodge a claim and to tell us they need help, to proactively reaching out ourselves?” she said.

Can AI help improve the industry’s image?

Leung said this could also help improve insurers’ reputations, an industry challenge for many years. Customers, she said, don’t necessarily see the value of coverages.

“Then when they need it, because they need to lodge a claim, we shouldn’t be making it hard for them either,” said Leung. “How do we flip that?”

The Hollard CFO suggested AI could be a relationship builder with customers. It could also add substance to insurer marketing campaigns that say these firms are there when customers need them – an assertion that is regularly questioned.

“I see that as the opportunity of AI,” she said. “Asking what could we do? If we know that a cyclone hit an area and we know we have customers in those areas, how can we be proactive about it?”

AI with the experts

Leung said her firm’s executive team recently spent a half day with the tech giant Microsoft to discuss and learn about generative AI.

“They were showing us different use cases that they had developed already for other financial services institutions, including banks and insurers,” she said.

This AI session helped inform Hollard’s current AI appetite, said Leung, for making the internal work of the firm easier.

“Something behind the scenes to help the staff go, ‘Where’s that clause?’, ‘What’s that specific term?’, ‘How do I refer to it? Where is it?’” she said.

Leung said this will allow staff to have better quality conversations with customers.

“It will also reduce the time that we keep a customer on hold while we quickly go look something up or try to find something,” she said.

Leung expected “incredible opportunity” for future AI uses across the industry.

Related Stories

Keep up with the latest news and events

Join our mailing list, it’s free!