Intelligently Operating the Future of Insurance  – article by Toby Yates

Insurance is evolving more rapidly than ever before. And the change accelerator everyone is talking about at the moment is of course Artificial Intelligence (AI). And this term is being used broadly to cover all manner of capability, from automation, GenAI / LLM’s to agents & agentic.

The reason for this? Well, it’s our view in Calitii that not many industries have as much to gain from an AI infused future as insurers. The complexity of masses of data (structured and unstructured), risk, pricing, product, multi-channel distribution, customer experience, and claims. Not to mention how entwined it is to macro-economics and wide ecosystems of assessors, repair networks, adjusters, legal reps and so on. If there’s a business that could claim the top spot for intelligent orchestration needs, there are few that could compete.

And whilst this typically frames cost saving potential through efficiencies and a greater ability to maximize distribution, it’s in fact far more than this. Our experiences of insurance as customers, what it costs us and how it turns up in our lives is all driven by how much of this complexity and structure is manifest in the way technologies have been built and architected into today’s modern insurer operating systems. These structures determine how the product (policy) is served to us, how it can be adapted to our needs, and ultimately how well the insurer can meet all our service needs. Not least when a customer needs the product to do its job and make a claim.

With one of the over-riding issues today being that we still encapsulate most of our enterprise design and business models around a policy. Whereas most of the value in orchestrating all of this more intelligently in fact aims to drive customer outcomes. Where everything from how you identify (proactively) and manage a complaint, all the way to how you guide employees to drive proactive outcomes for customers. Or even how you might monitor (real-time), report on and provide audit capacity for risk, compliance, or service resiliency (e.g. DORA).

The future of insurance is unlocked in vastly more intelligent operations. To do this isn’t straight-forward. Data needs to be fluid, data threads need to help data find its way to a customer context, we then need an intelligent interpretation of this (AI), but we also need a way to ensure a deterministic outcome. Where the machine is also in a process or workflow and only when responsible will it directly guide an outcome. Perhaps referring to some rules or clearly determined outcome options. To model a more fluid and a “better for customer” business model like this takes some effort, but it doesn’t have to be a big bang transformation either.

Evolving towards this is a sensible approach. Where you look to apply intelligent orchestration by building the most valuable outcomes for customers. If we take complaints, something that is a surprising burden on insurers and its customers, and an issue with significant financial implications. For example, The cost of complaints to insurers is large, with millions in redress paid out (e.g. in the UK estimate costs are £31.5m for travel, £702.4m for motor in H1 2024) and case fees charged to them by the FOS in the UK (around £650 per complaint after the first three), while professional representatives face fees after their free allowances.  It would therefore be reasonable for insurers to want to:

• Find ways to gain more insights on complaints, why they are happening, what can be done to avoid them…

• Proactively identify things that could trigger a complaint, like when a claims journey for a customer stop looking optimal, and then guide outcomes to rectify this

• When a complaint does happen – making sure the way it’s handled is optimal, prioritizing responses that will avoid further escalations or cause the customer more distress. Driving fast action and settling this effectively is a priority for the customer and the insurer

• If it does go to FOS then making sure it’s settled efficiently

• And that all of this is real-time, instantly auditable and in turn made into a strategic opportunity rather than a cost management obligation

Now these aren’t unusual objectives, but with things like ServiceNow we can develop these solutions fast, ensure they are then part of building out determined, but automated and intelligent capability, using pre-defined tooling and capacity.

Similarly, applying this to things like FNOL, claims processes, email management, enquiry, call center scripts or even how your IT manages increasing audit requirements for things like the FCA, DORA or just to meet Risk assessment needs internally. All of this can be solved the same way.

Evolving this vastly more intelligently operated insurance future, whilst delivering value outcomes on a continuum. The modern insurer must streamline and automate more, whilst also being more transparent and resilient.