The Evolution of Insurance: Operations Fusing with Customer Outcomes – article by Toby Yates

When we talk about AI and how it applies to insurance, we need to ask why we need it, and what we are trying to achieve. Simply applying AI in itself has no definable value beyond perhaps cost savings. And yet this value chain thinking is holding insurers back; most operational improvements would in fact have both an employee and customer benefit.

So, it’s important that we start with the vision we have for a more intelligent insurer. How will making better, faster, and more effective decisions make customers’ lives better?

Hopefully, our vision for this future is similar to yours — ultimately, we think it’s a more valuable, empathetic, and human one. And we think that ends up changing both the product and the service model of insurance, but it definitely doesn’t mean simply applying AI to what insurers do today.

And while we have always had capable and intelligent people within insurance organisations, we make sure they are deterministic in their jobs, running as a collective essentially, against a hard backdrop of ratios. And using AI is no different; we need to orchestrate it carefully and keep humans in the loop and in control.

Ultimately, we have to make insurance work. And to make it work smarter isn’t about a free-ranging bot “doing its thang”. It is, in fact, about freeing huge amounts of operational data (we have a significant data problem in insurance) and making sure that it is converted into deeper knowledge of a customer and then determining how we use it.

There are no shortcuts to our intelligent future, but it is exciting, and we do need to get going on that journey. And this isn’t — and can’t be — achieved in one go; instead, it needs to evolve, which means it requires proper thought — a new enterprise design no less! To tackle this, we think of insurance in three distinct layers:

• The Customer Ecosystem, which includes everything from a mobile experience to the ways in which customers can submit a form.
  The Intelligent Operations layer that makes it all possible.
  The Data Orchestration layer providing the fuel that makes the whole thing work.

Now, these layers are all important, but for insurers evolving towards more intelligent outcomes, dealing with the messy middle is essential — we need to fix operations. It’s where we make sense of data or analytic inputs and where we orchestrate and determine employee and customer outcomes. It’s also where most IT complexity, technical debt, and change are applied. And it’s how we make new products work or enable new service outcomes in the first place.

This is why we see insurance operations fusing with customer outcomes. And to make insurance work better and smarter, we need to adapt processes so that complaints are managed effectively, claims experiences are optimised, IT outages are avoided or at least resolved quickly, audits are fulfilled effectively, and risk is managed on a continuum — proactively rather than reactively.

All these things are the hard graft of making insurance work, and all of them rely on our ability to make sense of data, determine decisions from that data, and then apply those decisions to outcomes.

Customers’ lives get better when operations get smarter. Calitii, as part of the Synechron Servicenow Practice, is uniquely placed to help deliver this. Find out more about how we envision the architectural model of insurance — and why the middle is key to unlocking insurance’s future. enquiries@calitii.com