Disrupting insurance with AI and CaaS platforms
The insurance industry has been hit hard by the COVID-19 pandemic.
It is too soon to say exactly by how much, but a pre-tax loss of $1.36mn as a result of COVID-19. This insurer loss comes from exposure to entertainment, commercial property and travel insurance, but there are few areas that have not been affected. Fraud also continues to be a considerable problem with insurance sector fraud currently costing around £1.3bn a year in the UK, (Experian, May 2020).
Unlike other industries, however, insurance businesses are not likely to receive much public sympathy, rather their coverage continues to revolve around a perceived goal of wriggling out of paying claims and letting customers down. Whether you believe any insurer would survive on a business model that sought to regularly refute claims (I don’t), it must be understood that the industry employs over and, as such, it is incredibly important to our economy.
The purpose of the Insurtech industry is to use technological innovations to disrupt and streamline the current insurance model, and in the evolution of InsurTech solutions there has arguably never been a more important time to step up and prove the value of the systems we develop.
The technologies we have at our disposal can be extremely powerful and intelligent. In the case of Pact’s Claims as a Service platform, for example, it is possible to reduce claims processing times from weeks to minutes, cut fraud by as much as 44%, and significantly enhance the customer journey.
The system works by providing insurers with a white-labelled consumer app and web portal as the mechanism by which the claim is made, supported by a back-end claims automation platform. The app uses facial recognition and behavioural analytics to verify the identity of the claimant from the start. Policy cover and limits stored on the app can then be automatically reviewed and the claim validated by using more than 50 separate data points. This includes details of cancelled flights and even the weather if such conditions have a bearing on the claim.
The user can upload relevant documents or even video in support of their claim via a smartphone/tablet, and store that information in the event that it is needed again. The insurer, meanwhile, can check that such documents are genuine, and not simply lifted from the web as has happened in the past! There is also a ‘Machine Learning Chat Bot’, called ‘Ollie’, which is designed to advise, assist and further simplify the user experience by delivering real-time notifications, keeping users informed of how their claim is progressing.
Pact delivers all the most important numbers a traveller may need globally, from embassy to medical emergency telephone numbers. In the wake of Coronavirus (COVID-19), it will soon provide tracking of worldwide viral and bacterial epidemics with vaccination information that a traveller may need to know before going on their trip.
In recovering from this pandemic and supporting our economy, the insurance industry’s problem is two-fold; to restore customer faith and reduce and re-coup losses. Technology is now readily available to do both, and significantly improve the customer’s claims experience, the process we know causes the most frustration. We’re able to support the bottom line, ensuring that resources previously spent on manually processing claims can be spent resolving the more challenging disputes in a timely way and fraudulent claims are identified efficiently and quickly.
This article was contributed by Mark Seddon, CEO and Founder, Pact Global