The insurance landscape is transforming faster than ever, catalyzed by the infusion of digital technologies. At ITC Vegas 2023, an insightful fireside chat featuring Carpe Data Chief Product Officer, Scot Barton and Erik Roen, SVP and CIO: Claim for Travelers, discussed how major insurers are leveraging digital intelligence to yield tangible outcomes. In this recap, we delve into the pivotal role of digital intelligence in reshaping insurance processes from risk assessment to customer interactions.
Technology Improvements: The AI Advantage
The insurance sector’s embrace of Artificial Intelligence (AI) isn’t a recent phenomenon. As Erik Roen highlighted, Travelers has integrated AI and machine learning (ML) models within their claims process for over 15 years. However, the advent of Large Language Models (LLMs) is unlocking unprecedented opportunities for insurers. These technologies are pivotal in navigating the evolving risk environment, enhancing customer and agent experiences, and transforming workplace operations. With digital intelligence, Travelers aims to cement its position as an industry leader in risk expertise.
How Digital Intelligence is Used in Insurance Today
Roen underscored the influence of AI in equipping Travelers to address the rapidly changing risk landscape. AI tools not only aid in comprehending risks but also enable insurers to pivot quickly as new challenges and opportunities arise.
The deployment of digital intelligence fosters highly personalized interactions with customers and distribution partners. This technological stride towards personalized, prompt, and accurate communication signifies a total paradigm shift in customer service, enabling a future where insureds communicating with their insurer is not a dreaded interaction but a pleasant one. Digital intelligence is set to redefine many such traditional workflows, creating short to long-term opportunities across claims, underwriting, and beyond.
Current Technology Limitations
Despite the benefits, digital intelligence is still young and has a number of drawbacks to work through. Roen candidly discussed the challenges, such as the initial underwhelming performance of chatbots on dispute resolution outcomes and the continued need for human judgment in the claims process. For Travelers, digital tools act as a ‘co-pilot,’ augmenting rather than replacing human expertise. He emphasized the necessity of change management and the development of new skills like ‘prompting’ and conversational techniques to navigate these technologies effectively.
Process Improvements: Automated Data
Scot initiated the discussion with a reference to an Insurance Post article reporting a 16% increase in application fraud, highlighting the significance of knowing your customer and understanding file participants/vendors. Enhanced AI tools at Travelers detect patterns and linkages in data to combat fraud and improve customer experience. With pressure from increased severity of claims, tools like automated social listening and service provider performance assessment are crucial in prioritizing activities that result in tangible improvements to the customer experience.
Process Improvements: Automated Systems
With a noted increase in fraud even before the COVID-19 pandemic, the value of Straight Through Processing (STP) was discussed as a solution to alleviate the burden on adjusters. Roen pointed out that while technology has advanced, many carriers have yet to reimagine workflows to fully capitalize on these advancements. He stressed the importance of a more flexible architectural approach to claims systems to integrate new capabilities seamlessly. Moreover, a revamped First Notice of Loss (FNOL) process and real-time data verification could streamline claims management, reducing redundancy and enhancing efficiency.
The conversation at ITC Vegas 2023 with Scot Barton and Erik Roen shed light on the transformative power of digital intelligence within the insurance industry. While challenges persist, the potential for improved risk management, customer engagement, and operational efficiency is immense. As insurers like Travelers adapt and innovate, the digital intelligence landscape continues to offer a rich ground for strategic advancements, ultimately driving real-world results that benefit insurers and their customers alike. As we move forward, the role of digital intelligence in shaping the future of insurance becomes increasingly undeniable.