The life insurance industry has, over the past several years, endeavored to do more to appeal to younger adults and simultaneously take advantage of emerging technology. There have been plenty of conversations in the sector, writ large, about the issue, but now more participants seem to be arriving at answers they think will work for them going forward, and potentially propel the industry as a whole back to some of the heights seen in the past.
At the latest Life Insurance Conference in Chicago, which has been an annual event since 2003, organizers planned a number of sessions regarding advanced technology and their potential applications in the sector, according to Think Advisor. This is hardly the first time subjects like artificial intelligence and robotics have been discussed at the conference, but four such events obliterates the previous record. This was set just last year when organizers scheduled a single breakout session on AI and the Internet of Things.
What will be discussed?
One of the sessions on robots and artificial intelligence, presented by Gartner analyst Kimberly Harris-Ferrante, will discuss how life insurers have already begin to use robotic process automation (also known as workflows) as a means of making behind-the-scenes processes more efficient and potentially save money.
Another session will examine the way in which AI and the blockchain can be combined to give life insurers an advantage going forward, the report said. The event will also feature sessions on other topics, such as regulatory changes like the Tax Cuts and Jobs Act or new fiduciary rules from the U.S. Department of Labor, and how those will likely affect the life insurance industry.
Understanding the situation
Many life insurers already use AI in some capacity or another, and polling shows that the vast majority of decision-makers within the sector believe it's going to be a vital tool that could significantly overhaul the industry's day-to-day operations within just a few years, according to personal finance expert Daniel Wesley, writing for the Forbes Technology Council. There are plenty of practical applications for AI in the life insurance industry, from reviewing claims and boosting processing efficiency to reducing internal errors that could be a major impediment to smooth processes.
The fact is that a lot of the way the life insurance industry currently works is by requiring people to do a lot of manual sifting through data, which can be time-consuming, tedious and prone to human error, the report said. By incorporating AI into even these basic tasks properly, companies may be able to free up massive amounts of man-hours to improve their processes in other ways. This added value could, for example, be used to more effectively get the message about the true value of life insurance out to the general public in ways that may not have previously been possible.
The problem for many life insurance companies right now is that they need to make that initial investment to truly wring a lot of nascent value out of the existing information they may have available to them, according to Insurance Business America. Right now, many just aren't equipped to do so, and it may be significantly holding their businesses back from reaching their true potential.
"Probably the biggest challenge life insurers are facing is how to work with and monetize the tremendous amounts of data they collect," Dror Katzav, CEO of the analytics and big data service provider Atidot, told the site. "Many companies we talk to are saying 60-80 percent of their data is not accessible for decision making. Ideally, what they need to do is augment their data with external sources that can run predictive models to help them understand the consumer, and then leverage that predictive analysis to make business decisions."
This fact obviously presents a significant opportunity for companies that have yet to make this kind of investment, and it could unlock profitability for many parts of their business, Katzav added.
When life insurers face the future in a strategic and well-informed way, they will position themselves for success not only when it comes to opening up internal efficiency, but potentially also as it relates to improving client relations on an ongoing basis.