Discover the impact of Covid-19 on the insurance industry and how customer expectations have changed. Explore new business models, digital transformation, and the role of technologies like AI and data analytics. Learn about modernizing systems, enhancing security, and leveraging partnerships for growth. Find insights on talent acquisition and maintaining core systems. Get a comprehensive view from Sourabh Chitrachar, the regional vice president of Liberty Mutual.
Welcome to CXO Talk show! In this episode, we have Sourabh Chitrachar, the regional vice president of Liberty Mutual, joining us. We will be discussing the impact of the Covid-19 pandemic on the insurance industry and how customer expectations and market demands have changed over the past few years.
The insurance industry has experienced significant changes in terms of customer expectations and operational practices since the pre-Covid-19 era. Previously, there was a greater reliance on manual or face-to-face interactions. However, there has been a shift towards virtual enablement, which has continued to evolve. Customers now expect seamless interactions with insurance companies, banks, and other organizations, facilitated by personalized and virtual experiences.
This change in consumer behavior has driven the industry to focus on more personalized customer interactions. Additionally, organizations have rapidly shifted towards a new work-from-anywhere model, which requires seamless connectivity and the ability to work from any device. Implementing such solutions presents challenges in terms of data security, as organizations deal with sensitive customer and employee data, subject to regulatory requirements in different countries.
The industry has also witnessed the emergence of new business models, such as micro insurance, embedded insurance, and pay-as-you-use models for various products, including motor and health insurance. For example, wearable devices like Fitbit can help monitor a customer’s health, allowing insurance carriers to better assess risks and prevent losses. Similarly, pay-as-you-go policies cater to customers who do not use their vehicles daily, enabling them to pay premiums based on actual usage.
In the commercial space, smart home and industrial solutions provide risk assessment and preventive measures, such as alerting clients to potential fire hazards or pipe bursts. Overall, there is a trend towards more personalized customer experiences, aided by new technologies. From an organizational standpoint, there is a continued focus on security aspects, as well as conforming to regulatory guidelines in low-interest environments.
Increased competition in some countries has led to dynamic pricing and attractive offerings for consumers, influenced by the availability of comparison tools and enhanced customer experiences. The industry is undergoing multiple changes, driven by external regulations, consumer demands, and the need to improve employee experiences.
The insurance industry is currently experiencing significant digital transformation, driven by technologies such as AI, machine learning, and data analytics. These technologies are reshaping various aspects of the industry, including underwriting, customer experience, risk assessment, claims processing, and customer interactions.
For example, pay-as-you-go models and personalized customer experiences are becoming more prevalent. Additionally, advancements in smart homes and smart industrial solutions are influencing insurance practices. Risk assessment heavily relies on data, and as new technologies, customer demands, and regulatory requirements emerge, digital solutions are being adopted.
AI-powered chatbots are being used to answer generic questions during the policy purchase process, while tools for quick quotes enable customers to compare premiums across different carriers. Data and analytics play a crucial role in dynamic pricing across the industry.
Claims processing has significantly improved with the use of analytics, OCR, and AI technologies. The process, which used to take weeks, can now be completed in as little as 15 minutes. By uploading a photograph of the damage, the image can be matched against various databases, allowing for quick assessment and determination of repair or replacement costs. GPS and geosensing technologies help locate nearby garages for repairs.
Furthermore, chatbots and sentiment recognition technologies are enhancing customer service interactions. Sentiment analysis allows call center agents to gauge customer emotions based on voice modulation and provide appropriate assistance. Sales and distribution benefit from comparison tools and dynamic pricing enabled by machine learning, artificial intelligence, IoT, and advanced data analytics.
Collaboration between traditional insurance companies and insurtech startups is an interesting development. Insurtech startups often focus on specific parts of the insurance value chain, while insurance companies need to consider the entire value chain. Partnerships or acquisitions may occur when an insurtech startup possesses capabilities that the insurance company lacks. However, integration with existing systems and technology alignment can pose challenges. Domain knowledge and understanding of the overall organizational process and governance become essential factors for successful collaboration.
The insurance industry is evolving towards more agile and customer-centric approaches, considering its complex and traditional nature. This evolution is driven by a paradigm shift in customer behavior and demographics, as well as changes in employee attitudes towards organizations. Technology plays a crucial role in enabling this transformation by introducing concepts from the technology industry and facilitating changes in project management.
When asked about top focus areas and tech priorities of Liberty Mutual over the next three to five years, Sourabh highlights three areas: modernizing systems, increasing focus on security due to the lack of boundaries in the industry, and leveraging ecosystems and partnerships for growth. He also emphasizes the importance of personalization and data analytics in delivering a tailored customer experience. In terms of crucial technologies for industry growth, Sourabh mentions the significance of data, artificial intelligence, API strategies, and cloud technologies. He also discusses the impact of low-interest rates, the importance of customer experience, the emergence of new business models like embedded insurance and cyber insurance, and the need for agility to meet regulatory demands.
Sourabh acknowledges the challenges of talent acquisition in the insurance industry, as it requires both skill sets for new technologies and expertise in maintaining core systems. Finding a balance between the two is crucial for successful execution of initiatives and capability building within organizations.
Overall, Sourabh’s viewpoints are based on his experience and interactions with peers in the industry.
