Insurers must smarten up to stay ahead of the technological curve

Insurers must smarten up to stay ahead of the technological curve

Insurers must smarten up to stay ahead of the technological curve
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Technological developments have provided us with a new way of living and running our businesses. Artificial intelligence has been around for decades, and machine learning, also referred to as ML, is becoming increasingly popular.

Yet their true meanings are sometimes misunderstood. While AI is where robots can mimic the actions of humans, ML is a type of AI software enabling more accurate predictions than previously possible. The two phrases are not synonymous.

Like all other industries, the insurance industry is adapting and adopting these technologies into its way of working.

A recent report by KPMG found that in 2022 alone, spending on cognitive and AI systems will reach $77.6 billion and could save insurers almost $1.3 billion.

That is because there are numerous critical drivers for the incorporation of AI and ML in the sector, including but not limited to increased regulation, access to larger and more accurate data sets, and decreasing fraud, waste and abuse.

Like many international markets, the Gulf Cooperation Council has recently increased its regulatory requirements on the insurance industry. As a result, reporting is now more in-depth than ever, thus leading to an industrywide need to adopt technology to support these requirements.

Using AI and ML allows us to create extensive reports quickly, efficiently, and effectively, in a way not previously possible using only a human workforce.

We see this not as a replacement for traditional teams but as a robust support system that ensures effective and reliable delivery of regulatory requirements.

For insurers, ML also plays a vital role in this area as the ability to access more accurate data and predictive modeling for both the business and our clients.

Imperative to this implementation within the insurance sector will be a fresh mindset regarding using advanced technology. Industry leaders must understand technology’s vital role in the future and see it not as a risk but as a rewarding tool.

Early adopters within the industry have experienced vital support from clients courtesy of their ability to increase efficiency, which in turn positively impacts their customer base.

It is not only behind the scenes that the benefits of technology can be felt. Customers can also notice more tools to support their journey and user experience. Such features include chatbots and virtual assistants to help with customer service and the implementation of automated claims from registration to settlement, saving clients both time and effort.

Research from Kearny found that the implementation of chatbots in Europe increased out-of-office sales by 11 percent, reducing the time insurance agents spend handling customers’ requests by some 40 percent.

It is important to note that although highly beneficial, there are also challenges to consider. The initial investment for technological improvements can be extremely costly, and sometimes the returns are not always immediate.

Training is also crucial to the successful implementation of these practices. If teams are not trained on new technology, it increases the likelihood of misuse and avoidable errors, which may not be so easy to identify immediately.

For this reason, it is essential that leaders actively understand and research ongoing developments in this market. That way, they can individually evaluate the best ways to implement advanced technology for their specific budget, business and ultimately, a better working life.

• Georges Chidiac is CEO of Damana Holding.

Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point of view