Magazine

Read the latest edition of AIR and MEIR as an Interactive e-book

Mar 2024

IT in Insurance - Customer Engagement through Personalised Advice

Source: Asia Insurance Review | Feb 2016

Andrew Dart
The technology is out there – engaging customers using the latest AI developments. Mr Andrew Dart of CSC encourages insurers to tap into this goldmine of possibilities which other industries are embarking on. The opportunities are simply endless.
 
 
Telematics and wearables seem to be the flavour of the year in the insurance industry. We have seen several motor insurance telematics http://www.nationmultimedia.com/business/BKI-to-apply-telematics-to-cut-risk-from-young-dri-30247937.html and wearable life insurance propositions http://cw.com.hk/news/manulife-hk-debuts-health-tracking-insurance-concept launched here in Asia over the last 12 months.
 
   Most insurance companies start out by providing premium discounts in return for customers sharing their data. We see this model being used for motor insurance (vehicle telematics) in pay-how-you-drive insurance, where how well the customer drives determines, how big the premium discount they receive.
 
   In health and life insurance, this model is just emerging. In a similar vein to motor insurance, the wearable model seeks to make you more active and healthy, giving discounts based on the level of activity measured by the wearable device.
 
So what’s the catch?
The trouble with these models is that the engagement effect wears off pretty quickly as the premium discount often only occurs on a yearly basis. No value is being returned to the customer in the interim, despite customer data being shared constantly.
 
   To counter this, many carriers in the life and health space also provide websites or apps with heaps of information and useful tools. It is left to the individual, however, to find the information or tool that applies to them. There is nothing really tying it all together for the customer.
 
   It is similar with rewards in wellness programmes. Often there are hundreds of rewards laid out, but it is up to the customer to find and remember the right reward at the right time to ultimately extract value from the programme. Too often, it is too much trouble and the customer is left with the feeling that they are leaving money on the table. That negative sentiment is problematic for the model.
 
   In motor insurance, the situation is much the same with very simple driving advice sometimes being provided based on telematics data, or coupons for fuel discounts and the like. There is nothing taking all of the data from the vehicle, driver behaviour and planned trips to proactively suggest technical changes to driving style, or that it is time to check the tires, or change the oil or ask why the vehicle’s fuel economy is so different from similar makes and models. It up to the individual driver to have these insights.
 
Finding engagement
To engage customers, we need to give them a reason to keep coming back for more -- a reason for integrating the website or app into the very fabric of their lives, making it faster and easier to get the value. For example, all the healthy recipes, all the exercise routines and health tools on the insurer’s wellness portal, will certainly keep members coming back.
 
   Imagine an app that you could talk to, that was smart enough to ask questions and give feedback. For example, it could ask: “Did you just complete a work out? [based on fitness tracker data] Can you briefly tell me what your routine included?”
 
   After a few days of learning about your exercise programme by asking questions, it asks: “Seems your exercise programme is overly focused on building upper body strength. Have you considered mixing it up a little with some aerobics? I can suggest some routines based on your fitness level if you are interested.”
 
Use of AI
The use of an Artificial Intelligence (AI) “buddy” or “coach” in apps to proactively assist, give feedback and encouragement is an emergent trend. If well executed, a personalised advice programme could eventually become a trusted source of information and feedback for customers, binding them more tightly to the brand behind the coach.
 
   The Lark app http://www.macworld.com/article/2915600/lark-puts-food-logging-on-your-wrist-with-new-apple-watch-app.html is one of the best early examples of this I have seen. It provides nutrition advice based on the customer telling the app what they have eaten. The free app generated an amazing 200 million interactions in the first three months after the launch in April 2015. Many of the customer reviews rave that the experience is uncannily like talking to a human.
 
   Building engagement has been the key to Lark’s success and the company’s CEO talks of injecting love into the app’s interactions with end users http://medcitynews.com/2015/11/lark-ceo-on-inserting-compassion-into-artificial-intelligence-app-for-healthcare/ to provide lasting behavioural change. Lark has been working in this space for over four years and aspires to be THE AI for health and fitness http://www.bizjournals.com/sanjose/news/2014/12/22/lark-takes-on-the-fitbits-of-the-world-using.html .
 
Train me Watson
Another example in the health and fitness area, is the “TRAIN ME” app which is powered by IBM’s Watson https://developer.ibm.com/watson/blog/2015/08/07/ibm-watson-powers-new-fitness-app-train-me/ and is used by personal trainers. The app saves the personal trainer’s time by gathering the latest training and exercise information based on their client’s individual profile.
 
   Mr James Wood (Positive Difference Personal Training) said: “TRAIN ME will make it possible for trainers like me to ask questions in everyday language and get answers in less than three seconds that take into consideration medical research as well as a client’s metabolism, physical structure, fat distribution, and hormonal profile. The results are targeted recommendations and expert advice for personal trainers and their clients to better reach their fitness goals.”
 
   In Japan, SoftBank is also working with IBM to use Watson for insurance purposes http://techcrunch.com/2015/02/09/domo-arigato-mr-roboto/ with a view of embedding into SoftBank’s robot “Pepper”. If that were to happen, it would move our “coach” from being a purely virtual entity into one with a physical presence.
 
FitBit Coach
All of these developments which employ data from wearables have not been lost on some of the mainstream fitness tracker manufacturers, who are starting to launch their own “coaching” apps. Their motivation is to turn the array of data their devices produce into actionable information for their customers http://gadgetsandwearables.com/2015/12/16/taking-activity-tracking-to-the-next-level-fitness-coaching-from-the-wrist/ .
 
What makes a Next Gen coaching app?
The key ingredients of these coaching apps are:
• voice interaction – conversational, natural language processing
• contextual awareness – knowing when and when not to interact
• heuristic  – always learning about the customer based on data shared and the domains in which it is expert
• impactful – making it easier for the customer to achieve their specific goals
 
   As noted in Mike Elgan’s recent article http://www.computerworld.com/article/3018162/emerging-technology/the-dark-side-of-the-coming-chatbot-revolution.html., there is a down side to these kinds of apps in that they can become quite addictive to some segments of the population. He wrote: “The combination of intelligence, loyalty and faithfulness is irresistible to the human mind.”
 
   From a marketing point of view, these are the very attributes needed to push brand affinity and successful up-sell/cross-sell, and will make these platforms the marketers’ tool of choice over the next few years.
 
The bottom line
The insurance industry is already launching data driven products through the use of telematics devices and wearables.
 
   The industry must move beyond simple pricing discounts and start to use the data these devices provide as a means to deepening engagement with customers. By using the latest AI developments, insurers will be able to turn the data they gather into useful proactive advice for their customers while building greater trust and intimacy. This will create a fantastic platform for future brand and marketing activities.
 
   And by the way, please do not interrupt Siri while she is talking, as it is just plain rude.
 
 
Mr Andrew Dart is Insurance Industry Strategist at CSC.
 
I hope you had as much fun reading this piece as I did writing it. If you did, please let me know by hitting the like button at the top of the page. If you want to see more of my “off the wall” comments, you can follow me on Twitter @ITInsuranceGuy. Finally, I’m keen to hear what you have to say, so please use the comment panel to share your views.
 
   See you next time.
 
| Print
CAPTCHA image
Enter the code shown above in the box below.

Note that your comment may be edited or removed in the future, and that your comment may appear alongside the original article on websites other than this one.

 

Recent Comments

There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.