The rising cost of insurance 2019

Published on Jan 07, 2019

Welcome to 2019, well it’s a little late but anyway. A lot of us make New Year’s resolutions to have a proactive new year so, why doesn’t your business make New Year’s resolution to become more competitive and profitable? If you had one business orientated New Year’s resolution what would it be? How would that resolution help your business? Don’t let 2019 be the year you lost business.

I always like to start my year by writing down what I will achieve personally then I write down what I want my company to achieve.

I predict this year will be an even bigger year for insurance technology, we saw industry pioneers in 2018 carve the way for revolutionary ideas that came to light finally for the insurance industry. Artificial intelligence (AI), machine learning (ML) and deep learning algorithms are some of the most prominent technologies at the moment. Bigger, better and faster algorithms are being built and developed every day to automate laborious and monotonous tasks that just clog up the work day. This is fantastic for us, the consumer and insurers because automating these boring processes will allow staff to be used for better tasks, while reducing cost. With those cost reductions, insurance policies can be more competitive and this will drives sales as we all love a bargain. But is life as simple as that?

Claim frequency and cost are expected to rise and insurers have been warned that they should expect more expensive and more frequent claims with-in the auto insurance sector. This is partially due to a rising demand to cover the complete cost of the claim from vehicle repair, storage, recovery and more expensive components being fitted for example sensors, cameras etc. If this takes effect in the coming year or so this will probably mean higher premiums for policy holders but aren’t these things meant to get cheaper with the advances in technology? Yes is my answer, policies should get cheaper with the introduction of smart bot’s and automated process there’s huge amounts of savings for insurers. If you settled your insurance claim through an AI automated process then shouldn’t you the policy holder see some of the savings?

If this prediction is correct don’t you think insurers should start acting now to prevent costly processes from further driving up the cost of insurance? It’s about staying ahead of your competitors. I know many businesses have legacy systems in place and huge amounts of data stored in hard to access format and this is why insurers should partner with insurance technology providers. A partner who knows insurance, understands AI and who won’t get them into a Catch-22 situation with long contracts that only means more expense and technology that outdates itself at the end of every quarter.

Most new vehicle claims within insurance have images and unstructured data attached to the report, this means an insurance claim representative has to analyse the images to validate damage which is very time consuming and then representative has to go through all the other unstructured data. Not only do claim representatives have to troll though endless amounts of images and data they have to talk to the policy holder, which is again is time consuming and often stressful. Would it be better to augment your claims team with automation so that they can focus on providing support and help to your policy holders at their time of stress? So, how to lower premium prices, reduce processing time, increase productivity, all with excellent authentic customer services and at the same time increase profit?

Automate with technology, done! I wish it was that easy and it’s definitely easier said than done in the insurance industry but many companies like TonkaBI are starting build automated systems and bring about that much needed change. When you take out a car insurance policy what do you look for? The additional clauses such as the medical cover? The deductible? Do you read all 10 or 20 or so pages? Maybe, but let’s be honest we all look at the price of the policy. Insurers need to be competitive not only with their prices but with their back-end technology to stay ahead of the game. If insurers continue through 2019 with the same technology and the same way of processing claims and policies into 2020 then that year may not be a good year for them. 20-20 vision not looking so good.

An example of how to automate an expensive and time-consuming process within car insurance is a bit of a technology cocktail. First you integrate AI processing for analysing vehicle damage and to combat those naughty fraudsters, then, mix in ML chat bots for collecting policy holder details and accident reports, here you have a real sophisticated process which will save time and money. This isn’t new technology but when this technology is built correctly and implemented in the right way it’s magnificent, the best cocktail ever!

I believe 2019 will be the year that separates quick thinking and fast acting insurers away from the pack, we will see a big division between the insurance providers and this will be down to one thing, accepting change and embracing technology. Will the big insurers act fast enough and adopt change - technology doesn’t sleep but your employees do.

Posted in Insurance AI Blog on Jan 07, 2019