ITIJ Insurtech May 2019 Review by Voyageur Group

MAY 2 019 ISSUE

BROUGHT TO YOU BY

REVIEW

THE AUTOMATION GAME

How is the digital claims revolution changing travel insurance?

IN THIS ISSUE

LETâ&#x20AC;&#x2122;S CHAT

PLUS

Rise of the virtual assistants

Instant payments, blockchain and more

Help your members find the best type of healthcare

wherever

they are...

provide them with

Contact Global Excel at StandbyMDinfo@globalexcel.com or at +1 819 566 8833

globalexcel.com

HEALTHCARE RISK MANAGEMENT SOLUTIONS

INSU RTECH RE V I E W

EDITORIAL COMMENT Hello, greetings and welcome to both established readers and new faces – we at ITIJ are enormously proud to present our inaugural Insurtech Review, a shiny new publication dedicated to emerging technologies and the seismic impact that they are having on the insurance industry. Why dedicate a new publication to insurtech? Well, as much as some may wish it wasn’t the case, technology is here, it’s changing the way we do business, and the genie is not going back in the bottle. So, we are staring the revolution defiantly in the face, putting away our quill pens and inkwells, binning our typewriters, embracing these newfangled

‘computers’ and boldly going where no insurance journalists have gone before. Over the next 28 pages, we explore the rise of the chatbot, asking how these new virtual assistants are making the customer journey smoother, and look at the effect that the transition to digital claims is having on travel insurance. We are also delighted to bring you a trio of thought leadership pieces from exciting figures in the insurtech space: B3i’s Chief Marketing Officer Ken Marke offers his expertise on blockchain, Cover Genius CoFounder and CEO Angus McDonald explores the benefit of instant payments technology on the insurance industry, and R3’s Global

CONTENTS

Let’s chat Rise of the virtual assistants

The automation game How can travel insurers benefit from the digital claims revolution?

Editor-in-Chief: Ian Cameron Editor: Stefan Mohamed Copy Editors: Robyn Bainbridge, Lauren Haigh, Mandy Langﬁeld & Sarah Watson Designers: Will McClelland & Rosi Yip Advertising sales: James Miller, Kathryn Zerboni Contact: Editorial: +44 (0)117 922 6600 ext. 3 Advertising: +44 (0)117 922 6600 ext. 1 Email: mail@itij.com Web: www.itij.com

Head of Insurance Ryan Rugg posits that, while technology may be dramatically altering business practices, these innovations rely on well-founded, long-nurtured networks. We hope that you enjoy the first issue of the Insurtech Review. If you have any feedback for us or wish to offer a contribution for a future edition, please do get in contact – we always love to hear from our readers.

STEFAN MOHAMED Editor

Blockchain and travel: are they really worlds apart? A lesson in blockchain technology from Ken Marke of B3i

An instant route to a better customer experience Angus McDonald of Cover Genius explores the benefits of instant payments

The unfaltering power of the insurance network R3’s Ryan Rugg highlights the importance of solid foundations

the information contained in this publication, or in the event of bankruptcy or liquidation or cessation of the trade of any company, individual or firm mentioned is hereby excluded. The views expressed do not necessarily reflect those of the publisher. Printed by Pensord Press Copyright © Voyageur Publishing 2019. Materials in this publication may not be reproduced in any form without permission INTERNATIONAL TRAVEL & HEALTH INSURANCE JOURNAL ISSN 2055-1215

Published on behalf of: Voyageur Publishing & Events Ltd, Voyageur Buildings, 19 Lower Park Row, Bristol, BS1 5BN, UK

The information contained in this publication has been published in good faith and every effort has been made to ensure its accuracy. Neither the publisher nor Voyageur Publishing & Events Ltd can accept any responsibility for any error or misinterpretation. All liability for loss, disappointment, negligence or other damage caused by reliance on

I NS UR T E C H R E V IE W

Blockchain and travel:

are they really worlds apart? Ken Marke, Chief Marketing Officer at B3i, gives a little lesson in blockchain technology, and how it could benefit travel insurance from both a business and consumer perspective Blockchain – or more correctly, Distributed Ledger Technology – is not a completely new technology. It has in fact been in use for over 10 years in the field of cryptocurrency.

as well as servicing and handling claims, can be simplified and made more efficient. Beyond simply improving existing processes, blockchain will offer opportunities to review and revise how travel insurance is serviced. What is blockchain? Initially a practice designed to support the recording of cryptocurrency Bitcoin transactions

security’ and the opportunity to develop automated contracts. Understanding the benefits to the travel insurance world As all transactions are externally logged on a blockchain between its participants, it offers a level of transparency unavailable in the current insurance model. For example, there are often multiple levels of stakeholders involved

Blockchain permits any stakeholders to collaborate and agree on the legitimacy of transactions without a central body overseeing that process In the business and insurance world it enables information to be shared quickly, securely and confidentially with the added bonus of immutability and smart contracts. It is commonly known that the insurance industry consumes and shares data in high quantities. Much of this information is private data on individuals, and reliance on this information requires trust and transparency. Blockchain helps to provide users and data owners with confidence in the authenticity of the data and its security. This article aims to demystify the concept of blockchain and expose some of its uses and relevance to travel insurance. Existing processes of distributing policies to customers,

transferred between two parties, today blockchain technology has evolved to become a protocol that allows the recording of any type of transactions transmitting value. It permits any stakeholders to collaborate and agree on the legitimacy of transactions without a central body overseeing that process. The method is transparent, based on predefined, impartial, consistent and efficient applications disseminating a secure, digital and chronological record which is immutable, shared in real time and completely auditable. The technology platform provides significant efficiencies due to the nature of the single and shared ‘record of truth’. It also facilitates secure data sharing or ‘cryptographic

throughout the lifecycle of a travel insurance policy, especially if the policyholder has to make a claim; information may need to be shared between the insurer, broker and customer before it even reaches the hospital or healthcare professional. This process of going from one end of the chain to the other can be slow, but blockchain can help with that. When a holidaymaker needs to make a medical claim while abroad, the attending doctor would be able to send and receive information about a patient’s medical records, policy cover and any data which is related to that case immediately and in real time. Not only is the process incredibly private, but here blockchain offers a massively streamlined interaction –

INSU RTECH RE V I E W

making it a valuable proposition for the insurance world. Real-world application Blockchain-developed programmes can dramatically increase the efficiency of service in two ways. Firstly, by applying automation within blockchain, insurers can establish ‘pre-approved contractual agreements’ (i.e. smart contracts) with hospitals and physicians. Secondly, when completed transactions between parties take up a ‘block’ that’s subsequently linked to the ‘chain’, over time results form a dependable record of all medical interactions for the patient and the rest of the value chain. A further illustration of distribution progress comes from the example of a health insurance agreement, where each party would usually give the other a contract whilst dealing with many third parties. With blockchain technology, each stakeholder can now individually and digitally load only the information that’s relevant to their shared contract. This means no oversharing of information – and when a transaction is executed, all partakers can view the status, history and process of what’s being authorised. True disruption and adding value The global travel insurance market is expected to be valued at more than US$35 billion by 2025, owing to increasing levels of tourism globally. Thus, tourism growth has provided an impetus to the industry to capitalise

I NS UR T E C H R E V IE W

on the rising demand for insurance among travellers. But, we’re in an increasingly uncertain place with new issues that can impact travel plans and the insurance arena – for example, terrorism, Brexit and evolving US travel and medical restrictions. Brexit in particular presents UK travel insurers with

The global travel insurance market is expected to be valued at more than US$35 billion by 2025 some uncertainty in areas such as the future of the European Health Insurance Card, what form any future reciprocal arrangements may take and how this may impact medical costs in the future. When it comes to issues we can control collectively, how can we best add value? Regulation is increasingly focusing on customer value, so we need to be able to demonstrate this more effectively. Customers expect exceptional service irrespective of price, so this must remain central to any customer proposition. As an enabler to the insurance process, blockchain can help improve the customer journey, often when people are at their most vulnerable, having experienced an accident or requiring support due to delays. Blockchain can add further value as follows: • Better customer care, when they need help the most. Patients will experience an increase in speed with regards to the authorisation of treatment by

insurers and understanding of cover. Plus, medical records will be delivered more quickly to healthcare practitioners. • Increased speed in paying policyholder claims. For example, in instances such as travel delay compensation, details will already be known by insurers and shared to the value chain via blockchain technology. • Increased transparency and fraud protection

• among insurers, reinsurers and regulators through distributed databases. Pre-existing medical conditions cannot be ‘forgotten’ during the quote and buy processes, as they will be accessible to insurers and brokers through distributed technology. • Risk transparency. Improved ability for insurers to calculate and price risk through new, verifiable and secure sources of data.

INSU RTECH RE V I E W

Better for the customer The more we know about customers and the more intelligent the data and technology, the more insurers can tailor products to address the shifting change in travel needs. Technology such as blockchain and AI can enable services to be efficient and automated – making the customer journey smoother. However, it’s often true that the only time you really find out how good your insurance company is, is when you go to make a claim.

A traveller may want to speak to someone friendly and knowledgeable for support on the end of the phone, rather than be ‘helped by an algorithm’ We must, however, protect our customers from over-automation. A traveller in need may want to speak to someone friendly and knowledgeable for support on the end of the phone, rather than be ‘helped by an algorithm’; soft skills and trained employees remain paramount for listening to customers and communicating with them. Team members like this are the shop front for the company. Blockchain should only be used when it’s the right thing to do: after all, we all want the service reputation of our industry to continue to soar and engender greater trust with customers.

Ken Marke has extensive international experience in the insurance industry, across the areas of operational, corporate development and strategic management. He has worked in several markets including the UK, Europe and the Far East. Currently leading the marketing and communications strategy for B3i, Ken applies a strong leaning towards future thinking and strategies for disruption, whilst constantly striving for change and challenging the status quo.

I NS UR T E C H R E V IE W

obyn Bainbridge explores how the rise of chatbots is helping insurers to make the customer journey more user-friendly

Abhishek Bhatia, Group Chief Officer and New Business Models CEO of online insurance company FWD Singapore, which recently launched its own virtual personal assistant called Faith,

In an age of artificial intelligence and instant messaging, there has been a surge in the adoption of chatbots by businesses – and they have seen a marked increase in popularity within the insurance sector in recent years, with many travel insurers quick to utilise them in their customer service platforms. So, what

Chatbots are, for the time being, predominantly messenger-based are the benefits? And how are these chatbots likely to shape the future of the travel insurance industry?

noted that the insurance industry is emerging as one of the biggest adopters of AI, and one of the prime examples of this is the chatbot. Chatbots have an incredibly rich and

fascinating history – condensed down, it reads something like this: pioneering scientist and mathematician Alan Turing not only saved the day with his decrypting efforts during WW2, but also set the scene for the modern-day chatbot with his 1950 article Computing Machinery and Intelligence, as well as his renowned Turing Test. Influenced by these, in 1966 Joseph Weizenbaum created Eliza – one of the earliest forms of chatbot, which was able to simulate human

conversation. A line can be drawn from momentous scientific and technological advancements such as these to later evolutions of the chatbot within insurtech, and these are appearing increasingly as part of customer-facing platforms, with extremely successful results. The emergence of the chatbot Save a few exceptions (that may likely become the standard in coming years) – such as Etiqa Insurance Singapore’s

INSU RTECH RE V I E W

recently launched, voice-activated chatbot Trix, available through Google Assistant – chatbots are, for the time being, predominantly messengerbased, in keeping with popular trends

Numerous insurance companies worldwide have adopted the chatbot in one of its forms: travel solution and chatbot provider Zumata, based in Singapore, launched its ‘Jiffy Jane’ travel insurance chatbot in collaboration with NTUC Income, which is able to answer FAQs while supporting the entire travel insurance transaction, and can be deployed across numerous messenger platforms; Swiss insurer Zurich created its chatbot Zara to handle a wealth of general insurance claims; and London-based Pluto utilised Facebook’s Messenger Bot Store to allow its customers to quickly access their policy and manage their travel insurance on the go using Facebook’s messaging platform. The existence of Facebook’s Messenger Bot Store, which launched back in 2016, should be in itself enough to highlight the obvious market for the chatbot within business. Statistica revealed that there were two billion Facebook Messenger uses as of 2018 – a number forecast to grow to 2.48 billion by 2021. And there’s good news for appbased chatbots too, as consumer downloads ar hich revealed that use of messaging apps is growing, and notes that mobile continues to be the main driver of overall ecommerce growth. Certainly, it’s a good time to invest in the chatbot. Josh Zeigler, CEO and Co-Founder of Zumata, told ITIJ: “Travel insurance is considered as a high-volume and low-value transaction, where the policy and benefits can be easily understood by consumers. This is an ideal use-case for chatbots to handle.” Renaud Million, Co-Founder and CEO of Spixii – a UK company that works to provide the insurance industry with customer-facing chatbots and has worked with several travel insurance providers such as Allianz Partners and Zurich UK – noted that

LET’S CHAT of communication. Some of the reasons for chatbots popping up are obvious: advancements of the internet, social media and mobile devices have paved the way for instant access to

Mobile continues to be the main driver of overall ecommerce growth knowledge and communication, and with these advancements, consumers have come to expect a lot more in terms of customer services.

some of the immediate advantages the chatbot has over face-to-face conversation and web forms is being able to ‘combine different methods of distribution, different claims services providers and low margins and high expectations from the customers in terms of digital experience’. Indeed, the chatbot in its messenger form appears to be one of the most organic developments of the insurtech landscape. Benefits to the customer “Chatbots, by their very nature, are there to support the customer when they need it, wherever they might be,” said Alex Last, Operations Consultant at Zurich Insurance. Truly, improved access is one of the greatest mercies that chatbots afford the customer, especially in an era in which, as Last put it, ‘society becomes data rich, time poor’. He noted that, while travelling, an incident can occur in another country, in a different time zone – both elements that can complicate the claims process in what is an ‘already stressful situation’. “Utilising automated service agents, the customer can reach their insurer whenever and wherever they are, safe in the knowledge that we’ve been notified and they can concentrate on alternative methods of resolution – be it an alternative flight, medical attention or finding accommodation – for their immediate needs,” he told ITIJ. The 24/7/365 nature of the chatbot means that travel insurance services can cater to the customer’s schedule, on a device of their choosing, which Last reasoned ‘matches the lifestyle challenges of customers’. According to Rainey, this was why Pluto utilised the Facebook messenger chatbot – it enabled customers to quickly access, update or ask questions about their claim online, through their phones. And Bhatia notes that this 24/7 access is a ‘game-changer’, as it enables customers that would normally have to send an email or request a call-back outside of office hours

I NS UR T E C H R E V IE W

ITI J

AWA RD S

2019

to have their claims attended to immediately. Additionally, Rainey noted that the vast majority of Pluto’s audience already has the messaging app installed, which drastically reduces the barrier of the customer needing to set up a new account or download a new app. Mike Hope, CTO of IBM’s Insurance Enterprise Unit, also explained that, by contacting the consumer on their preferred channel, customers can be kept up to date with their policy throughout the period of cover. Simplicity goes hand-in-hand with accessibility when it comes to the chatbot. Zeigler explained that, unlike a website, where the customer is ‘forced to navigate and read potentially large blocks of textual information’, chatbots can provide ‘instantaneous responses’ to customer queries. Additionally, Rainey noted that the chatbot offers a speedier service for customers looking to search for contact details in an emergency. Not only do chatbots provide the customer with a more convenient, time-saving solution compared to a website, but Million illustrated that they offer a more personalised solution, whereas webforms are a ‘one-size-fits-all’ technology. “[This] leads to limitations in the experience, maintenance, iteration and, ultimately, customer feedback and conversion rates,” he said. What’s more, the ‘conversational approach’ of chatbots, which Zeigler awards_insurtech_strip.pdf identified, means that they can

answer questions and tasks on a platform that ‘requires no learning curve for the consumer’. This makes for a far more engaging product for the customer; as Rainey puts it: “When your insurance is just sitting, buried in your inbox, it’s not really doing anything for you.” Alongside all this, the chatbot offers still more benefits to the customer. Million points out that it can save customers both time and money: “From an operational perspective, if a customer talks to the chatbot for five minutes or 45 minutes, it costs the same, which is a fundamental

If a customer talks to the chatbot for five minutes or 45 minutes, it costs the same, which is a fundamental shift in metrics measuring performance

25/04/2019

shift in metrics measuring performance, moving the unit from time to the conversation itself.” In another ground-breaking move, as of 2018, FWD Singapore’s Faith also gained the ability to pay out for claims electronically, which Bhatia notes eliminates the need to make payments via cheque, which can 08:02 take five days or more, or even run

NEW FOR 2019

Insurtech Initiative of the Year Has your company embraced the insurtech revolution? Showcase your game-changing solutions

CMY

FIND OUT MORE AT

ITIJ.COM/AWARDS

the risk of getting lost. The chatbot offers a cost-effective and on-trend digital solution that addresses the much-needed personal and professional balance, and as Zeigler highlighted: “The results in terms of ROI and improved customer experience are impressive.” The general reception of chatbots for these companies has been overwhelmingly positive. Talking of the introduction of both chatbots and messaging, Mike Hope said that Net Promoter Scores (NPS) for customers have increased significantly. Rainey notes that, for Pluto, ‘customers like the simplicity, and being able to access everything easily in one place’, while Bhatia stated that, thusfar, customers have given Faith an average satisfaction rating of 4.5 out of five stars. “The feedback we’ve received has been overwhelmingly positive, as consumers have been impressed by the additional convenience, better engagement, and instantaneous response offered by our chatbots,” Zeigler added. Benefits to the insurer As Rainey highlighted, ‘the main benefits are (and should always be) with the customer’. But luckily for insurers, benefits for the customers usually directly affect benefits for the insurer. “Allowing customers to self-manage their policies, which is what they want anyway, can reduce the number of customer support requests,” Rainey explained. “The

INSU RTECH RE V I E W

same can be said for submitting claims. By making it easy to find out how to submit a claim – whether in an emergency or not – an insurer can further reduce the need for human customer support.” The reduction of costs and resources is a significant benefit for the insurer, and Bhatia also claims that the chatbot can reduce pressure on business operations during peak travel seasons, when there is a spike in questions and claims submissions. Million noted that by using chatbots to notify claims, time savings of up to 30 per cent can be observed: “Chatbots work 24/7 with no extra costs for serving customers out of office hours, which usually represent 40 per cent of interactions.” Last highlighted that chatbots allow insurers to ‘receive a far deeper first notification of loss’. This both reduces the investigation time and allows staff to provide the best-case strategy decision from day one of the customer’s claim. He notes that Zara has the ability to ingest dashcam footage, video and still images of a loss/ damage, and that this ensures that Zurich’s claims handlers have a better grasp of the incident, as well as ensuring that Zurich is able to provide its liability decision within a quicker timeframe. In this instance, chatbots provide far more accurate information, which is crucial when validating claims. “This ultimately reduces our

time to settle metrics and provides a far more efficient customer experience,” said Last. In addition, Last also pointed out that more accurate information leads to reduced claims costs, which in turn ‘ultimately helps to make Zurich – and other insurers – competitive in the

market with its pricing’. Zeigler also suggested that the chatbot offers businesses greater customer insight: “Each interaction can be logged, categorised, and analysed. Consumers’ interactions with a chatbot can help companies identify gaps in their messaging quickly, and even lead to new product ideas.” Million told ITIJ that one of the biggest potentials of chatbots is the ability to ‘give granular feedback on question after question’, which helps insurers to understand quantitative and qualitative feedback – both on the journey provided by the chatbots, and also on other traditional channels currently provided, such as the phone. “Analytics can tell in real time when chatbots are engaged or when customers are dropping out, as well as the NPS of their experience,” explained Million. In this instance, the chatbot is an investment that continues to give back to the insurer while it works, helping insurers to recognise how to further improve their services to increase customer satisfaction and efficiency. Insurers can also benefit from chatbots’ simplicity: Pluto’s Facebook Messenger Bot not only provides ease of use and familiarity to the customer, but Rainey also notes that: “The Facebook bot platform is very advanced compared to the other

I NS UR T E C H R E V IE W

options. It’s easy to build and set up a chatbot and there are a number of rich features, like web views, payment, human support, sharing and much more.” As previously highlighted, launching a chatbot also allows

insurers to meet the customers on their preferred platform. “[This can] significantly increase customer satisfaction with the brand, due to speed of resolution and convenience,” said Hope. Another result of this improved customer experience is that insurers have access to an even larger market of potential customers, helping them to gain the edge

over competitors. Being relatable and accessible, while maintaining a strong social presence, is increasingly important for providers looking to evoke positive attitudes of satisfaction in customers, while keeping

up with the competition. The human touch As with all advancements, it’s important to recognise the limitations in order to progress. The chatbot platform is still in the early stages of implementation within the travel insurance industry, and as such is still experiencing a few ‘teething problems’. Chatbots.org’s recent survey of UK and US consumers highlighted that 55 per cent of people in the UK and 62 per cent in the US found that having to repeat information that they had already given to a chatbot to a human assistant afterwards was the biggest hassle when using chatbots. The survey also found that there appears to be a generational divide in terms of people’s reception of the chatbot – fewer numbers of older generations (Baby Boomers and the silent generation) rated chatbots as ‘very effective’ compared to Generation Z and millennials. Both Rainey and Hope recognise that the chatbot has its drawbacks; Hope says that chatbots are not effective in their own right, but that being combined with a messaging platform for agents is the ideal way for these to be implemented into insurance, while Rainey notes that: “Inevitably, customers do want to speak to a human, and this is a huge, often under-appreciated, part of the chatbot. A good chatbot should recognise its limitations and help connect a customer to a human at the right time. The insurer can benefit again here, because a support agent can support multiple customers, and the customer can pick up this conversation whenever and wherever they want.” Rainey also acknowledges that he is a ‘little underwhelmed’ by the current Messenger Bot Store: “There is a lot of work still to be done to bring bot discovery on par with app discovery.” However, he reasons that Pluto

INSU RTECH RE V I E W

promotes the chatbot after purchase, so it isn’t considered to be a key source for new customers. Million stated that ‘it takes years to perfect chatbots with the right skills to deliver personalisation and

automated manner.” Bhatia believes that chatbots will have an impact on the way insurers deploy their human resources, as they take over common insurance tasks: “It will allow us to ‘up-skill’ our employees and help them gain knowledge in AI, machine learning, data science and conversational design – and potentially deploy them in roles that demand for greater skills.” Looking further ahead, it seems increasingly likely that speech-recognition chatbots will be the new standard in travel insurance. As previously highlighted, Eqita has already advanced its insurtech onto voice-channel platforms, working with Google Home to provide chatbots that customers can converse with without having to touch a finger to a keyboard. And Meeker’s Internet Trend’s Report 2018 can also provide some valuable insight into this prediction: with Google’s machine learning word accuracy reaching 95 per cent and Amazon Echo’s install base surging to an estimated 30 million at the end of 2017, it seems an inevitable development. For now, however, the current messenger-based chatbot offers an excellent addition to the services already offered by

A good chatbot should recognise its limitations and help connect a customer to a human at the right time scalable effectiveness’, explaining that the main challenge for chatbots revolves around culture. Rainey further illustrates this point, warning that chatbots still pose a slight risk as they are now in the ‘infancy of their implementation’: “More needs to be done to understand exactly what customers want to ask, and until a chatbot can deliver on these needs, insurers must be very careful to launch them – they can put themselves at risk of delivering a poor experience for customers.” Still, this need not deter insurers from adopting the technology, as Hope highlighted: “Clients are used to messaging in their personal life, so business needs to catch up.” Zeigler concurs, arguing that insurers that lag behind in terms of adoption will end up with ‘bloated cost structures’: “Insurance company profitability differs primarily as the result of cost base, and as futurelooking companies maximise use of chatbots, those companies will be increasingly competitive.” Zeigler claims that, going forward, chatbots look likely to expand their scope and be able to handle even more complex processes. “An area already being experimented with is the claims process,” he said. “Once this takes hold, the entire customer journey, from exploration to purchase to administration of a claim, will be possible to handle in an

insurers – and occasionally, it’s good to balance it with a human touch. “People will always have a need to speak to humans in some situations,” said Rainey. “But for the other times – like being able to add winter sports to your policy at five in the morning on the way to the airport without speaking to someone – chatbots can provide a lot of value. It’s about knowing when they can be useful and when they cannot; technology will change where this line is drawn over time.”

I NS UR T E C H R E V IE W

An instant route to a better

customer experience Angus McDonald, Co-Founder and CEO of Cover Genius, explores how instant payment technology could have major benefits for the insurance industry A rise in mobile penetration and the roll-out of new online payment options are creating greater opportunities for global ecommerce businesses, which have found themselves in a marketplace that is pegged to exceed US$24 trillion by 2025. But as mighty as it seems, it has – until now – been an underserved market from an insurance perspective. Insurers simply haven’t been able to connect their products to the world’s leading ecommerce players because of barriers such as legacy systems and rising risk factors. Indeed, delivering a firstclass customer experience on a

global level, which runs from policy creation to an instant claim, has been inherently

difficult for insurers to achieve. This is due to three major challenges: • Manual processes in getting correct bank details, especially where the bank transfers are international and where there are different rules for 90plus currencies. • Global insurers are encumbered by monolithic legacy software systems and internal bureaucratic processes that delay claims and payment approvals. • Banks can be slow to notify payees if their payment fails.

A 20-plus days-to-payment timeframe just isn’t acceptable. A new level of customisation, in an instant The good news is that with the advent of fintech service providers everywhere in the payments value chain, there’s plenty of potential to resolve the points of friction that get in the way of faster payments. An example is instant payments.

What these challenges have meant for global insurers is that post-claim

Making payments into almost any currency is now possible; however, there are two important requirements: • There is a large service design approval payment times have exceeded 20 days. But we’re now in a world where cross-border commerce has become business as usual. And people are transacting across multiple currencies more than ever before, relying on their service provider to make sure that transactions happen seamlessly.

effort that accompanies the creation of bank accounts in all those countries. While the service design ensures that customers get clarity on the micro details of payments into their preferred currency, the second major piece of work is incredibly important: a microservices approach. • A microservices approach means that the customer

INSU RTECH RE V I E W

Developments such as the instant payment of claims have been seen to push NPS scores skywards, well above the industry average, by as much as 75 points.

communications, interface, payment delivery and notifications all need to come from separate APIs that sync together, but the process is seamless to a customer. It’s impossible to deliver a frictionless experience from legacy systems that encumber global insurers. In short, it’s one thing to invest extensively in data centres, labs and digital transformations, but ultimately the entire technology

space. So the emergence of a new breed of next-gen insurance providers couldn’t be timelier. Harnessing technology, they can slice through the complexities to deliver solutions that are both instant and stress-free. Importantly, these technologies can contribute measurably to the overall customer experience: developments such as the instant payment of claims have been seen to push net promoter scores (NPS) skywards, well above the industry average, by as much as 75 points. When an ecommerce brand’s success comes from having satisfied and loyal customers, maintaining differentiation in terms of customer experience is vital. To stay ahead in the game, they should look to integrate these latest technologies that are now emerging. If they don’t, they risk not having the ability to offer their customers custom policies in multiple jurisdictions and the ability to manage global distribution of instant payments to claimants.

Imagine booking a trip with one of the travel ecommerce giants, tailoring your trip around what you want to do, in the language you want, the currency you need platform of a traditional insurer is not suitable or flexible enough to take advantage of the innovations currently underway in the payments

Smoothly does it Racing headfirst into a partnership, however, is a risky business too. There needs to be careful consideration when choosing the right partner, to ensure a smooth journey flow. This is especially important in a travel industry scenario, as the insurance experience should blend perfectly with the wider travel-planning experience: imagine booking a trip with one of the travel ecommerce giants, tailoring your trip around what you want to do, in the language you want, the currency you need. The insurance journey needs to mirror this, rather than being a clunky add-on component. The journey should then flow just as naturally throughout the amendment or cancellation stage so the customer can remove the benefits that they don’t want. By creating a bespoke and satisfying experience for the customer, the business will benefit from strong NPS. Getting the next stage right – the claim component part of the journey – will be critical. Remember, today’s travellers expect instant solutions delivered to the palm of

I NS UR T E C H R E V IE W

their hand. If they need to make a claim because of a delayed flight, they expect it to be repaid in the same time it took them to book the flight in the first place. You need to ask yourself: • Can the customer lodge the claim easily and in their own language? • How fast is the response time? • And more importantly for the customer, how quickly can they get the money back? If this stage falls down, the whole experience of the insurance journey falls down.

Insurers haven’t been able to connect their products to the world’s leading ecommerce players because of barriers such as legacy systems and rising risk factors

Good for business Ultimately, the recipe for a successful insurance offering hinges on two key ingredients: consistency and customer-centricity. Consistency: make sure the messaging is clear, concise, tailored and consistent with the rest of the travel experience associated with your brand. Having a consistent experience is important for customers, and technology can help deliver this. Customer-centricity: a sad fact that is often forgotten in the world of insurance is that when a customer is making a claim, it’s because something has gone wrong in their life. You don’t make an insurance claim when everything is going well. And so, customercentricity has got to be at the heart of your insurance experience. It’s about being able to give a customer

a stress-free route to their payment, particularly when they are offshore, travelling in unfamiliar markets. It’s about giving them peace of mind, so they can either continue with their holiday or be repatriated without hassle or expense. And it’s about doing it instantly, or as near to realtime as possible. This is what differentiates the customer experience and is what will build trust and loyalty. If you’re an ecommerce travel business that’s looking to improve your insurance offering, or you are just starting out on your insurance offering journey, here are our top reasons as to why you should look to find the right partnerships with those tech-powered insurance providers who are at the bleeding edge of customer experience delivery: • Customer-centric policies and claims processes deliver NPS at scale. • High NPS create organic customer referrals. • Happy customers are repeat customers. • Higher lifetime value from each customer. • Less friction for your business at every step in the customer journey. • Differentiation from your competition. • Allow a growth mindset while your competition flounders. • Help shift value away from global insurers towards the rightful heirs – you have the customers after all!

Angus McDonald is Co-Founder and CEO of insurtech company Cover Genius, the parent company of XCover, a distribution platform that enables the world’s largest ecommerce companies to sell any line of insurance, and RentalCover.com, a B2B2C global specialty line insurer. Prior to starting Cover Genius, Angus was in the executive team of several high growth advertising technology companies, including iClick Interactive (NASDAQ: ICLK) and Yahoo. Angus has a Bachelor of Science majoring in Mathematics and Computer Science from the University of Technology Sydney.

THE SOFTWARE PLATFORM FOR FAST AND PROFITABLE GROWTH

INSU RTECH RE V I E W

TRAVEL INSURANCE FOR THE DIGITAL AGE Every minute of every hour of every day, someone takes out insurance via Aquarium’s platform. Aquarium’s ‘Travel Insurance in a Box’ platform enables companies and brands to quickly and effectively create and manage profitable travel insurance propositions. The platform is fully configurable: from policy benefits, policy limits, excesses and co-insurance to product rating, underwriting and document templates. The Aquarium platform provides a white-label ‘quote and buy’ consumer app for travel insurance, from sales through to claims. The platform covers the entire process from policy pricing and fulfilment, to accurate claims completion, based on rules-based automation. Travel Insurance in a Box provides automatic renewal pricing, according to the parameters set by the insurer. Marketing incentives and discounts are easily integrated for both new product sales and renewals.

MEDICAL ASSISTANCE WHEN IT MATTERS Efficiently and effectively delivering the care people need when they are away from home and vulnerable is one of the most challenging aspects of travel insurance claims management. Aquarium’s platform delivers a process driven software approach to managing medical assistance. Our platform’s case management and rules engine modules enable insurers to link up with the right medical services, delivering premium care at a manageable cost. By automating processes and proactively managing case overviews, the platform enables medical staff to focus on what they do best – caring for those requiring attention, not getting bogged down in administration. When travel insurance needs to be at its best, trust Aquarium to deliver. We’re ready!

For more information on how Aquarium’s platform can help your travel insurance business Call us now: UK: +44 (0)161 927 5620 or US: +1 213 205 2200 Email us: info@aquarium-software.com www.aqinsure.tech

I NS UR T E C H R E V IE W

THE AUTOMATION GAME W

hat are the benefits to travel insurers of implementing digital claims – and are they ready to make the transition to fully embrace the realms of new technology? Lauren Haigh spoke to industry experts to find out We are in a digital age where more and more processes are automated, and technology is advancing at an accelerating pace. Robots are no longer restricted to the world of science fiction; they are very real and all around us, not necessarily appearing as fully formed humanoids, but rather as specialpurpose tools that are facilitating tasks and improving quality of life. Think less RoboCop and more Tesla. Insurance is one industry that automation and digitisation are penetrating rapidly, particularly in the area of claims. Claims processing is the cornerstone of any insurance business and its digitisation is enabling the industry to streamline

the claims process in ways that were previously unimaginable. Now, forgive me for saying this, but I think we can agree that travel insurance is not what necessarily comes to mind when one thinks of the terms ‘futuristic’ and ‘modern’. And, indeed, much claims processing in today’s insurance space is carried out manually. However, there are insurers who are integrating automated claims processing into their businesses and discovering the efficiency and accuracy it affords, not to mention the improved customer satisfaction that comes from speeding up claims handling. ITIJ spoke to a number of industry

The key benefits for insurers are reduced claims management costs, which in turn helps to keep premiums as low as possible, and more accurate, speedy customer processes 18

INSU RTECH RE V I E W

experts to obtain their professional thoughts on the benefits of digital transformations in claims for the industry – insurers and consumers alike – as well as the potential challenges. AI in claims automation Joe Benson is North America Claims Offering Manager at DXC Technology, a US-based B2B multinational corporation that specialises in delivering end-to-end information technology services and digital transformative solutions for large and mid-scale global organisations. He provided ITIJ with an insight into how technologies are being harnessed in claims automation: “Insurers are using automation and artificial intelligence in claims processing to improve operational efficiency and offer a modern customer experience that meets today’s consumer expectations.” He went on to highlight the ways in which this is improving the customer experience, for example implementing AIenabled conversational assistance and speechto-text capabilities to provide customers with

a self-service option. “Customers can easily view or retrieve copies of their policies, make payments, submit photos for home inspections and initiate first notice of loss claims with no or little assistance from a representative,” he explained. Jeff Rolander, Director of Claims at Allianz Partners, also discussed the use of AI in the claims process, which is something that the company has been considering. “Allianz Partners is exploring several different technologies in our efforts to further enhance the claims experience for our customers,” he said. “AI is an exciting transformative tool that can make fast and accurate claims decisions when using structured data – supplied by either the customer via an online filing or by using a tool like optical character recognition.” Rolander also highlighted some of the tasks that robots are being used to perform, including repetitive but necessary tasks within the claims process: “This includes, for example, running the address verification tool we use to ensure we have accurate addresses for our customers.” Automated claims could be seen throughout the insurance landscape in future years. For example, Renaud Million, CEO of SPIXII in the UK, said in a recent article on Insurance Nexus that we will first see automated claims in the travel insurance industry: “Imagine that – thanks to data – a machine knows in real time when a claim is going to be made. In connected homes, should a camera see a house get burgled while you’re on holiday, it could process the payment – paper-free – with no interaction between the policyholder and claim support. This

Consumers increasingly expect results, including claims outcomes, in nearly real time. Digitalisation and automation support our efforts to meet and exceed those expectations 19

I NS UR T E C H R E V IE W

would completely transform the claiming experience.” Importantly, digital transformations in claims have the potential to help insurers and consumers save on costs, as Matt Cullen, Head of Strategy, Data and Analytics at the Association of British Insurers (ABI), explained: “The key benefits for insurers are reduced claims management costs, which in turn helps to keep premiums as low as possible, and more accurate, speedy customer processes – positive experiences that can help drive reputation and loyalty.” Advantages aplenty In addition to reducing the costs that are associated with policy servicing and enabling insurers to offer 24/7 service to customers without incurring the costs of operating a contact centre, Benson highlighted further areas that digital transformation in claims is benefiting insurers. “Using AI to initiate transactions and answer simple, high-volume requests and medium-complexity requests frees up customer service representatives (CSRs), agents, analysts and adjusters to address more complex, higher-value tasks,” he explained. “Optimising the customer experience enables insurance companies to establish deeper relationships with policyholders, which can prove to be more enduring and valuable in the long term. CSRs can experience reduced training time to be selfsufficient, reduced attrition and improved confidence levels, all of which lead to increasing customer satisfaction in a competitive environment.” Not only does the use of AI afford employees within the travel insurance sector time to focus on more complex tasks, it also enhances the

relationship between insurers and their customers. For customers, there are benefits beyond a faster and easier claims process, as Benson highlighted: “Consumers can enjoy an improved overall claims experience. Through the power of AI and automation, insurers can reduce average claimshandling times from weeks to hours. Additionally, customers can use selfservice options to initiate and check the status of their claims 24 hours a day, seven days a week, using voice or online and mobile applications. This visibility and access to status updates provides flexibility and is empowering for customers.” Muir Robertson, Managing Director at assistance, travel risk and claims management provider CEGA in the UK, further emphasises the positive response from customers. “Digital developments such as automated claims have helped to increase the number of written compliments we receive from customers and improve customer satisfaction scores.” An additional advantage to digitising claims processing is that modernising core claims systems can help insurers to build strategies around risk prevention and mitigation. “AIenabled fraud detection software combines predictive data modelling technology, identity search technologies, fraud indicator business rules, company claims information and industry data sources to help flag suspicious claims as early as the first notice of loss,” said Benson. “Additionally, insurers can use the fraud score to alter or influence the classification and assignment of submitted claims.” Considering challenges It sounds like a win-win situation,

Claims processing is the cornerstone of any insurance business

INSU RTECH RE V I E W

with digital transformations in claims benefiting both insurers and their customers. But are there any challenges associated with implementing these processes? Cullen explained to ITIJ that challenges will vary based on the type of technology being used. “An overarching challenge for insurers may be integrating new approaches with legacy systems that could be many years old, or integrating consistent approaches across a variety of books of business or distribution channels,” he said. That is to say that many insurers are using systems that have been around for a long time and may not be ready or able to convert these systems to more digital approaches. Benson agrees that this could prove challenging: “Many carriers have traditional systems that may not be

ready to interact with new digital platforms. After years of pondering how to erase their large, legacy IT

debt, insurers are realising they must develop the kind of digital infrastructure that’s needed to

I NS UR T E C H R E V IE W

support new digital initiatives.” However, he believes that there is a lot to be gained from making the transition to digital. “Insurers are embracing a dual agenda,” he said, “optimising value from existing systems while advancing toward an open platform of components and services. Embracing a digital platform enables insurers to shift their focus and investments from building and maintaining to integrating and aggregating.” In a similar vein, customers may also not necessarily be willing or able to adapt, as Cullen highlighted: “A key issue is for the industry to ensure that it still effectively serves customers who may not be keen, or able, to engage with digital approaches. For example, it might not be ideal if chatbot/appbased claim notification became so dominant that traditional phonebased approaches began to be taken out of service.” Robertson reinforces this point: “It’s important to use automation as part of an end-to-end claims solution that retains the human touch and does not disadvantage policyholders who want to submit claims to a human being, at any time of the day or night.” Therefore, it is important to strike a balance between implementing new digital systems that can improve the customer experience, and ensuring that customers who wish to use more traditional methods for making claims can still do so and aren’t disrupted. As such, insurers are able to ensure that they keep the consumer happy. Another potential challenge that Rolander pointed out is that the startup costs for these types of systems can be substantial. In addition, he agreed that the consumer could be burdened by the need to provide digital claims data and this is clearly to be avoided: “The primary challenge is finding ways to obtain structured / digital claims data (for example, a doctor’s note supporting the need to cancel a trip) from the customer with minimal inconvenience. Tools like online filing and optical character recognition can help bridge this gap.”

An additional challenge Benson discussed with ITIJ is the need for insurers to invest in the right companies. “Insurance companies are also increasingly looking to insurtech to add new digital capabilities. The challenge will be for insurers to vet the companies they want to invest time and energy in to ensure that they can combine the new capabilities with what drives current business value chain, and that the resulting business model will be sustainable,” he said. “A digital platform is key to solving both of those challenges. Recognising the power of open collaboration with new industry players, DXC is actively interacting in the insurtech market, vetting companies to engage with and curating a digital ecosystem for our clients.”

the

Mitigating digital disruption Despite the potential challenges associated with consumers transitioning to claiming digitally, the benefits are numerous and, as Benson emphasised, customers have made it clear that they want a digital environment in which they can manage their claims online and quickly get accurate and consistent responses from digitally enabled companies. As long as disruption to the consumer is mitigated, there should not be a problem. Robertson stated: “Claims automation enables insurers to offer customers more choice,

INSU RTECH RE V I E W

Digitalisation and automation support our efforts to meet and exceed those expectations.” He believes that digital is at the forefront of insurers’ minds and has benefits for insurers and consumers alike: “They want to reap the benefits of improved agility and cost savings from IT modernisation. They also realise millennials and the next generation of policyholders will prefer to engage with more modern digital platforms.” It sounds like the benefits of digitising the claims process outweigh any potential challenges. Not only can insurers ultimately reap cost savings, they can strengthen their relationships with policyholders and free up their employees to complete more complex tasks. Although the move to new technologies can be onerous, requiring insurance companies to transform their processes, the potential payoff is significant. Insurers have a lot to gain from moving into the realm of insurtech. Indeed, Benson believes that this transition is crucial for insurers: “Transformation is imperative for insurers, or they risk getting

A key issue is for the industry to ensure that it still effectively serves customers who may not be keen, or able, to engage with digital approaches more control and more convenience, transforming customer service.” Rolander agrees, and pointed out that digitalisation can help meet customer expectations: “Consumers increasingly expect results, including claims outcomes, in nearly real time.

left behind.” Whether the industry likes it or not, change is inevitable, and automation looks set to change the future of claiming. Insurers must adapt in order to remain competitive.

I NS UR T E C H R E V IE W

The unfaltering power of

the insurance network Technology may be fundamentally altering the landscape of insurance â&#x20AC;&#x201C; but, argues Ryan Rugg, Global Head of Insurance at enterprise software firm R3, these advancements are nothing without solid foundations Blockchain, AI, telematics, IoT â&#x20AC;&#x201C; the list of technologies currently

converging to transform the global insurance industry continues to grow. The breakneck pace at which this traditionally conservative sector is evolving is nothing short of breathtaking. But no matter how radical the advances in technology, there are certain underlying principles that remain critical to success. Chief among these is the

In order to build a successful blockchainbased exchange, it must first attract the network it seeks to support ever-important network effect. Take, for example, recent news of the creation of a blockchain-driven risk and capital exchange for the insurance market in Bermuda. This is a huge step forward for the industry, promising to cut frictional costs and allow brokers, reinsurance and insurance companies access to the capital markets using blockchain for the first time. Once established in Bermuda, it has clear applicability to the rest of the global insurance market, ultimately enabling market participants, brokers and risk carriers to develop and market new, competitive products and significantly extend their distribution reach. But how can these end-state benefits be achieved? While worlds apart in terms of technology and sophistication, the success of

INSU RTECH RE V I E W

such an exchange hinges on some of the same variables as the very first insurance market over 300 years ago. A common thread through history As anyone in this industry will know, its history dates back to the 17th and 18th Centuries, when Lloyd’s Coffee House was a significant meeting place in London for sailors, merchants and shipowners. The proprietor, Edward Lloyd, catered to these groups by providing reliable shipping news, and over time the coffee shop became the centre of gravity for the shipping industry to discuss maritime insurance, shipbroking and foreign trade. This ultimately led to the establishment of the insurance market Lloyd’s of London, Lloyd’s Register and several related shipping and insurance businesses. The success of Edward Lloyd’s insurance empire was built almost entirely upon the coffee shop’s reputation as a venue where the various groups involved in the global shipping trade could be sure they could meet other parties with which they wanted to do business. This same sentiment holds true when we consider what the insurance market

platforms in order to effect change and form standards, and the trend itself is self-reinforcing. As ‘Metcalfe’s Law’ states, the value of a network is proportional to the number of connections in the network squared – the more insurers that build upon on a common platform, the more valuable the platform becomes to all participants due to the inherent interoperability. Contract placement on the blockchain To best illustrate the importance of the network effect when deploying blockchain to overhaul an insurance function, it’s useful to examine a particular use case. Let’s take, for example, contract placement. This is a critical process that involves negotiating a potential

The more insurers that build upon on a common platform, the more valuable the platform becomes to all participants due to the inherent interoperability

MEDI C AL SC REENI NG FRO M C EG A

THE CHOICE IS

SIMPLE Antidote is CEGA’s online medical screening solution. Building on 25 years’ experience in medical screening, Antidote is the remedy to avoid renewal shock, create accurate risk profiling, and win and retain business.

DESIGNED FOR YOUR

CUSTOMER

CREATED FOR

YOU

• Faster and smarter

• Enhanced renewals and sales

• Fluid and dynamic questions

• Meets regulatory pressures

• Minimal repetition

• It’s your data

ANTIDOTE - READY TO GO Contact us and find out more:

of tomorrow might look like. In order to build a successful blockchainbased exchange, it must first attract the network it seeks to support. As blockchain technology matures and consolidates, multiple groups and ecosystems are coming together on the most appropriate

insurance contract between a broker and an insurer in order to issue the insurance contract that provides coverage for an end customer. However, for most commercial

E: angela.smith@cegagroup.com | M: +44 (0) 7866 553390

I NS UR T E C H R E V IE W

and specialty insurance scenarios, this is an arduous, complex process involving several entities – a broker, one or more insurers, and potentially a reinsurer and reinsurance broker. Further, outsized risks generally mean that multiple insurers come together to insure the risk at the requested limit price, resulting in additional complexity for the broker in managing the placement process. Contract placement, with the extensive negotiation cycle between a broker and insurer, as well as between an insurer and reinsurer – with or without a reinsurance broker thrown in – has several inefficiencies related to firms not being adequately ‘connected’ in the same network. These include extensive manual intervention and reconciliation for both brokers and insurers to keep track of requests and responses. This results in high IT spend for all participating parties in order to maintain an audit trail of the negotiation history between different entities. Additional heavy investments are also required by each firm in document storage systems to maintain separate contracts over the policy lifecycle and to ensure generated documents are tamper-proof. The network effect generated by involving brokers, insurers and reinsurers onto the same blockchain platform can deliver major benefits to the contract placement process. With all parties connected on one platform, near instantaneous communication is possible, eliminating delays associated with

reconciliation and co-ordination. In addition, real-time consensus on coverage, price, terms and conditions can be achieved among all parties involved in the contract, and the platform can automatically generate a complete audit trail from all sides of negotiations and data exchanges. The benefits extend further when the platform’s network includes the regulatory community. A higher standard of regulatory compliance

technology design. Data privacy, for example, is pivotal for a network of enterprises within a highly regulated industry like insurance; after all, it must be ensured that the entire insurance supply chain of brokers, insurers, reinsurers and insureds can interact in a seamless, secure and private manner. Unlike Edward Lloyd’s coffee house, our Corda platform – which includes data privacy as a key design element – was purpose-built from the

With all parties connected on one platform, near instantaneous communication is possible, eliminating delays associated with reconciliation and co-ordination can be achieved across the insurance industry with instantaneous communication of in-force contracts to the regulator. The widespread ‘double spend’ problem of having the customer buy the same policy from different insurers can also be eliminated by involving the regulator. Building critical mass So, the importance of attracting an extensive and diverse network to leverage the potential of a blockchain platform is clear. But how can critical mass be achieved? Ultimately, it largely boils down to

outset for its ultimate intention: to provide businesses in industries like insurance with a blockchain platform specifically designed to help drive efficiency, cut costs and bring new products to market. However, it still relies on the same network effect that brought London’s shipping community together in that Tower Street coffee house 300 years ago. Insurance has always been an industry with a strong heritage and sense of tradition, and blockchain is unique in its ability to continue these traditions whilst driving the sector into the next generation of technological evolution.

Ryan Rugg is spearheading North American business development in asset management and insurance for R3. She works closely with R3’s network of members and partners, helping drive global commercialisation and integration of the company’s Corda platform. In 2017, she launched the Center of Excellence for Insurers and Reinsurers at R3, which is aiming to redefine the foundations of insurance by harnessing the power of collaborative networks through the deployment of blockchain technology.

INSU RTECH RE V I E W

Make booking flights easy We are the leading medical repatriation specialist, a 24/7 medical travel agency uniquely skilled to route your passengers home.

www.voyageur24.com +44 (0)117 9210401 repats@voyageur.co.uk

I NS UR T E C H R E V IE W

SELL TRAVEL INSURANCE ONLINE Plug & Play technology solution empowering your customers to Quote, Compare & Buy.