AI enhancements should enable greater personalisation of the insurance mobile app experience
The worlds of insurance mobile phone apps and artificial intelligence (AI)-enhanced customer service are set to collide imminently, as recent research on technology in insurance suggests an increasing role for both.
A survey last year by Boston Consulting Group found that nearly a quarter of respondents believed that customer service was a considerable source of AI-generated value in the insurance space.
And research published by software firm Branch Metrics found that virtually all financial services organisations surveyed were focused on increasing mobile app downloads over the next year, with most believing that app users are more likely to engage with cross-selling activity.
The leading in-app features judged to be contributory to cost reductions for insurers and other financial sector firms were: live chat with service representatives; automated (AI-driven) chat features; access to paperless statements; and self-service tasks.
Insurance app evolution
With more consumers preferring to use their mobile phones to conduct a variety of transactions, the change-averse insurance industry has had to rapidly evolve its digital offering to keep pace with customer demand.
The development of mobile apps for insurance purchasing has proved to be a game-changer both for insurance companies and intermediaries and for policyholders – and the warranty insurance space is no exception.
The use of apps to buy warranty cover not only improves accessibility for customers to insurance products but enables more seamless customer services including policy management and claims handling.
However, as an industry, we have been slow to progress to the next step in the evolution of apps; leveraging artificial intelligence and predictive analytics to gain deeper risks insights, provide more tailored solutions and further improve claims efficiency and the insurance journey for policyholders.
Leveraging AI
Some insurtech companies have been forging a path for incorporating AI insights into underwriting and claims, and in the more agile MGA space, organisations have been quick to react with applications that provide a more personalised experience for users.
But we believe the next evolution of apps, particularly with respect to warranty insurance, will include the leveraging of AI for account rounding and selling, and the ability to offer ever more tailored products for innovative new consumer products – from VR headsets and smart glasses to self-driving vehicles.
In the MGA space, we have also been bringing AI into the insurance process for everything from auditing and regulatory compliance to fraud detection and live modelling of claims predictions from unfolding loss events.
In the case of a travel policy bought via the app, for example, AI can help the insurer prevent fraud by analysing pictures submitted by claimants in support of a lost or stolen luggage claim, to assess whether the claim has merit or not.
At the same time, app users should also be able to expect that, when they make a claim, the process is specific to the policy they have bought, removing the need to answer a whole list of questions that may not be relevant to their circumstances and coverage details.
Tailoring coverage
Apps can make the process of expanding the scope of cover fast and painless. For a travel policy bought for a particular country or region, the customer should have the ability via a mobile app to add an additional territory, but also narrow the scope of cover to a particular region within that territory, while specifying the range of activities in-scope for the expanded coverage. This would remove the need for customer to buy blanket coverage with a long list of exclusions at a much higher cost.
Tailored cover that is specific to individual policyholder needs and is priced accordingly, rather than effectively penalising customers with generalised cover and premium to match, is the evolution the insurance space needs to improve retention rates - and is the change that a personalised app experience is poised to deliver.
From a regulatory perspective, there will be a need to demonstrate that the market remains competitive for consumers, and that insurers who are benefiting from AI-assisted lower operating costs are passing that benefit on to customers in the form of reduced premiums.
In addition, far from AI and mobile distribution leading to disintermediation, the relationship with brokers will remain just as important in the drive towards a more personalised app experience for clients.
This is an expanding market, and we expect to see extensive growth in demand for warranty products in relation to the growing number of technological products available for consumers. The broker community will play an important part in connecting consumer demand with new insurance products and capacity.
