By: 14 November 2023
Addressing the human-AI balance: challenges in insurer digitalisation

7 November 2023 saw Future Processing host ‘Digital transformation and culture shift’, an online roundtable addressing the digitalisation of the insurance sector, and what that means for consumers.  

The contributors to the discussion were:  

The four selected experts covered a range of topics relating to the digitalisation of the insurance industry. Most notably, how insurers can bring themselves into the 21st century using AI and how customers will be impacted by the use of AI and other digitalisation efforts.  

One of the main takeaways from the roundtable was that insurers in general are behind on their digitalisation efforts. Whilst Insurtechs plough ahead, unencumbered by legacy systems slowing down their internal processes, insurers continue to push static products that may look great on the website but are subject to pitfalls in practice.  

Mike Gilpin commented that; “We’ve got a long way to go on some of the internal processes to see how those could really be harmonised and brought together and and and I do feel that (..) it’s one of those areas that’s often left to last” 

Mike goes on to explain that the appeal of developing front end products is much more appealing for insurers than overhauling their entire internal system which may not be keeping up with modern day demands.  

The roundtable also brought to light the prominence of AI usage in the modern insurance world. Questioning arose about the utilisation of AI in customer service.

As insurers become increasingly automated, how will this affect the customer?  

Dawid Glawdzin commented that the use of AI has seen a dramatic surge in the last 12 months, and it would be impractical to ignore its impact on the industry. 

Companies can use AI in a multitude of ways, ranging from implementing a straightforward customer request chatbot to directly processing claims.

Mike Gilpin stated that; “I’ve worked as part of a team automating the valuation of injury claims based on medical evidence and demonstrated that AI can produce more consistent and accurate results than human assessors. So, analysis has shown that the same insurance claim assessed by several human handlers could result in an average difference of over 50% in the settlement offer values achieved.”

“So that could mean for a similar claim, one person is offered £10,000 and another £16,000 for example. Ultimately the goal of AI and other technologies is really to improve fairness, so that valid claims could be resolved faster and with greater consistency of outcome.”

Evangelos Avramaki also addressed the need to make it clear to customers why this technology is necessary and how it can help them, even as AI becomes increasingly undetectable within sites and systems. Otherwise, insurers run the risk of losing their human connection with their consumer and alienating people from their services. The insurer also needs to inspect how they are using the data that they are collecting through their digitalisation efforts to benefit the customer, in order to make the data sharing worthwhile.  

In times of increased digitalisation, insurers also have an obligation to their employees, where AI might now perform roles that were previously taken on by individuals.

Job roles such as underwriting, and call centre operators could easily have their necessity reduced or eliminated by AI.  

As addressed by Lauren Stables; “I think they’ve got a responsibility to, to upskill employees in more (…) technical kind of digital areas, so the likes of maybe training the chat bots that they’re introducing.” 

Dawid commented that we need to find a healthy balance between human and chatbot “They have to find a healthy balance between (…) using the technology and (…) still having access to the (…) to the real call centre to the real underwriter. (…) The healthy balance needs to be there absolutely.” 

The experts concluded that insurance companies are not considered to be exceptionally customer-centric when they should be. The customer only interacts with their insurer when they are signing up for their policy and when they are making a claim. Digitalisation aims to make these two interactions more seamless by modernising the process from start to finish. However, it is necessary to consider that when customers partake in these interactions, they should also be able to communicate with a person should they need to, for insurers to maintain a human touch within their businesses.  

Image: © Karolina Grabowska via Canva
Emma Cockings
Emma is a content editor for Claims Media. Emma is a experienced writer with a background in client-centric personal injury for a major firm. She has attended and reported on multiple brokerage events throughout her career.