With customers increasingly demanding fast, convenient insurance quotes, the industry’s data leaders are feeling the pressure to develop products, services and experiences fit for the modern age

AI-driven insurance app Lemonade is the latest in a long line of financial services innovations designed to put customer experiences first.

Customers increasingly expect their interactions with brands to be fast, seamless and intuitive. As such, the data leaders who attended our Realizing Risk and Risk Intelligence roundtables are feeling the pressure to deliver similar customer experience (CX) improvements.

“We’re not moving quickly enough to keep up with those consumer expectations,” says Steven Wilkins, Head of Data Labs at Hiscox. “There are expectations from what consumers are seeing elsewhere. In personal banking, in consumer goods – all other industries are digitizing quickly.”

He adds: “If you go back to the days where it might have taken a week to turn [a policy] around, it’s just not really good enough for the new age where people are expecting things to be digital, quick and straightforward.”

“We want to get the right balance of good underwriting and speed. If you do one and not the other, you’ll end up with a lousy portfolio” – Shajy Mathai, Analytics Technical Officer, AIG

Of course, there is also a cultural aspect to customer demand. British consumers may expect to be able to visit a website, enter their address and get 20 home insurance quotes instantly. But that level of service is not yet commonplace in other countries.

“There’s a real difference I see between the US and the UK alone,” Wilkins says. “While certainly the UK is continuing to move forwards, it’s the US which is catching up so, so quickly.”

Faced with these rising expectations, data leaders in all segments of the insurance industry are looking for ways to streamline their companies’ interactions with customers.

Digitization is Transforming Insurance Processes

Maya is Lemonade’s AI underwriter. When a customer uses the app, she can kit them out with a personalized policy in as little as 90 seconds.

When someone makes a claim, another AI named Jim reviews claims and runs them through 18 anti-fraud algorithms. Simple claims are approved and paid out in seconds, while more complex ones are passed onto the company’s human team for review.

The speed and ease of these interactions has been a contributing factor towards the four-year-old company’s reported $2 billion valuation. Now, data leaders in other areas of the insurance industry are developing their own automated and AI-driven capabilities.

“We’re looking hard at the questions we ask and making sure the ones we’re asking are relevant and actually make sense for us,” says Wilkins. “We’re [also] looking at using external data and other sources that we can put in to stop us having to ask questions to all.”

“In the US, especially in some of their commercial spaces, the expectation is that they will walk into a shop, talk to an insurance agent and maybe in a few days they will have three quotes” – Steven Wilkins, Head of Data Labs, Hiscox

“If you were to buy commercial insurance right now, you’d have to answer 100 questions,” adds Alan Luu, AVP of Advanced Digital Analytics at Chubb. “Then, you’re going to have to wait for the underwriter to come back and say ‘approved’ or not ‘approved’.”

“With the program that we’ve put together,” he continues. “You’d be able to put your name and address in your mobile phone right now and within 3-5 seconds I’d tell you, ‘Here’s the quote.’”

Of course, completely digitizing all of a brand’s interactions with its customers won’t necessarily result in the best CX. When it comes to high value B2B purchases, customers often appreciate having a human account manager they know they can contact directly should something go wrong.

At the same time, some data leaders feel that it’s still too risky to entrust dealing with certain kinds of insurance policy to a machine.

“We want to get the right balance of good underwriting and speed,” explains Shajy Mathai, Analytics Technical Officer at AIG. “If you do one and not the other, you’ll end up with a lousy portfolio.”

That’s the tightrope insurance industry data leaders are walking in a nutshell. Lemonade may have raised the bar when it comes to insurance CX. The question now is how other insurers can do the same without compromising their portfolios.

This is an excerpt from our Future of Insurance Data report, published in association with Pitney Bowes Software. Claim your copy today for even more insights into how AI is transforming the insurance industry.