Artificial Intelligence Set to Transform Insurance Industry but Integration Challenges Remain, According to Accenture Report
April 19 2017 - 07:57AM
Business Wire
Insurers are investing in AI technology to
enhance the customer experience, empower their own people
Insurance executives believe that artificial intelligence (AI)
will significantly transform their industry in the next three
years, with insurers investing in AI to empower agents, brokers and
employees to enhance the customer experience with automated
personalized services, faster claims handling and individual
risk-based underwriting processes, according to Accenture’s
Technology Vision for Insurance 2017.
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At the same time, however, the report found that insurers face
challenges integrating AI into their existing technology, citing
issues such as data quality, privacy and infrastructure
compatibility. Titled “Technology for People,” the report is
based on the insights of a technology advisory board, interviews
with industry technologists and a survey of more than 550 insurance
executives across 31 countries.
According to the report, three-quarters (75 percent) of
insurance executives believe that AI will either significantly
alter or completely transform the overall insurance industry in the
next three years. One-third (32 percent) believe that their own
company will be “completely transformed” by AI within that
timeframe, and an additional 39 percent believe that AI will
“significantly change” their company.
“The adoption of artificial intelligence is gaining momentum
within insurance, with executives pointing to AI’s potential to
revolutionize the customer experience and empower agents, brokers
and employees,” said John Cusano, senior managing director and
global head of the Accenture Insurance practice. “Our research
shows that insurers are investing in AI technologies to, among
other things, improve customer interactions based on written and
spoken interactions, gestures, interactive touch displays and
hybrid mixed-reality platforms that merge the virtual and the real
world, with each customer exchange becoming increasingly
personalized.”
According to the report, the rise of AI is creating new
opportunities for insurance agents, brokers and employees to
deliver a better customer experience, with the technology enhancing
the way sales and services are executed, facilitating faster claims
processing, and enabling more-accurate, individual risk-based
underwriting processes.
Four in five (79 percent) of the executives surveyed believe
that AI will revolutionize the way insurers gain information from
and interact with their customers. When asked about the benefits of
embedding AI into user interfaces, more than half (55 percent) of
respondents cited better data analysis and insight. Further
highlighting the industry’s growing adoption of AI, two-thirds (68
percent) of respondents said they now use AI-powered intelligent
virtual assistants either across the organization or in specific
business areas to create better customer interactions.
“While insurers are increasingly aware that AI is central to
their success in the digital economy, their success is by no means
assured,” Cusano said. “As the technology evolves, insurers will
need to not only address data quality and privacy concerns, but
also revamp their IT architectures to support AI’s features and
technical dependencies. Insurers that focus on empowering people
with a human-AI experience and intelligently integrating AI into
their company will benefit from a powerful combination that drives
deeper customer engagement, stronger brand loyalty and
more-sustainable profits.”
AI is one of five key trends shaping the insurance industry
around which the “Technology for People” report is focused. In
addition to “AI is the new UI,” the report’s other themes are:
- Ecosystem Power Plays. Insurers
are building a more prominent role in new digital ecosystems to
unlock their next wave of strategic growth, complementing their
direct customer relationships with a push toward a broader
ecosystem approach. More than nine in 10 (94 percent) of executives
surveyed said that adopting a platform-based business model is
critical to their business, and three-quarters (76 percent) said
that their organization’s competitive advantage will be influenced
by the strength of the partners and the ecosystems they
choose.
- Workforce Marketplace. A surge
of on-demand labor platforms and online work management solutions
is up-ending workplace dynamics and traditional corporate
structures, replacing them with open talent marketplaces.
Four-fifths (79 percent) of respondents said they are under extreme
competitive pressure to extend innovation into their workforce and
organizational structure, with the report noting that a fast and
effective way to do this is by leveraging workplace marketplaces to
crowdsource innovation on demand. In fact, more than half
(54 percent) of respondent organizations said they plan to
grow their freelance workforce over the next year by anywhere from
25 percent to 100 percent, with another 9 percent
planning to more than double its size in that time.
- Design for Humans. Technology is
shrinking the gap between effective human and machine cooperation.
By leveraging adaptive technologies and interfaces that interact
with customers and employees in a more natural, human way, insurers
will be able to move beyond simple personalization techniques to
provide real-time services and risk-management solutions that
address customers’ actual behaviors and goals, using
customer-driven insights to drive innovation. In fact, more than
one-third (35 percent) of respondents said they plan to use human
behavior extensively to guide the development of new customer
experiences and relationships.
- The Uncharted. Other emerging
new technologies in insurance, such as blockchain, or distributed
ledger technology, could address the industry’s historically
cumbersome challenges of governance, accountability and digital
trust. Five in six respondents (84 percent) said that blockchain
and smart contracts will be either very or moderately critical to
their organization over the next three years.
“The technology behind autonomous cars, connected homes and
personal health is reducing claims, risks, premiums and revenue for
insurers as they grapple simultaneously with transforming their
legacy business in a digital age,” Cusano said. “But that same
technology is also the insurance industry’s biggest opportunity.
Insurance ecosystems are expanding and driving new platform
business opportunities, and a more liquid workforce continues to
upend traditional corporate structures. Insurers are increasingly
attuned to the power of a ‘technology for people’ approach as they
reshape and redefine their industry.”
To download Accenture’s Technology Vision for Insurance 2017
report, Technology For People, please click here.
Methodology
Accenture’s Technology Vision is developed annually by the
Accenture Labs. For the 2017 report, the research process included
gathering input from the Technology Vision External Advisory Board,
a group comprising more than two dozen experienced individuals from
the public and private sectors, academia, venture capital firms and
entrepreneurial companies. In addition, the Technology Vision team
conducted interviews with technology luminaries and industry
experts, as well as with nearly 100 Accenture business leaders.
In parallel, Accenture Research conducted a global online survey
of more than 5,400 business and IT executives across 31 countries
and 16 industries to capture insights into the adoption of emerging
technologies. The insurance industry report is based on responses
from more than 550 respondents at insurance companies in 31
countries across North America, Europe, Asia-Pacific, Africa and
South America. The goal of the survey was to identify the key
issues and priorities for technology adoption and investment.
Respondents were mostly C-level executives and directors, with some
functional and line-of-business leads, at companies with annual
revenues of at least US$500 million, with the majority of companies
having annual revenues greater than US$6 billion.
About Accenture
Accenture (NYSE:ACN) is a leading global professional services
company, providing a broad range of services and solutions in
strategy, consulting, digital, technology and operations. Combining
unmatched experience and specialized skills across more than 40
industries and all business functions – underpinned by the world’s
largest delivery network – Accenture works at the intersection of
business and technology to help clients improve their performance
and create sustainable value for their stakeholders. With
approximately 401,000 people serving clients in more than 120
countries, Accenture drives innovation to improve the way the world
works and lives. Visit us at www.accenture.com.
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AccentureJames Murphy,
917-452-0588james.p.murphy@accenture.com
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