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May 2019

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Trends in disruption

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Source: Asia Insurance Review | Jan 2019

The sector of InsurTech gets bigger every year, with more companies attempting to deploy innovative solutions for insurers and insurance customers alike. We break down the technology trends that were in play during the 2018 Singapore FinTech Festival.
By Ahmad Zaki
 
 
The ABCD of FinTech is a commonplace term now, and it was very evident when talking to the many start-ups at the Singapore FinTech Festival (SFF). Several InsurTechs and incumbents were deploying AI solutions both in the front-end and the back-end.
 
For instance, AIA Singapore introduced Pepper, a humanoid customer service robot – the first insurer in Singapore to do so. Powered by AI and machine learning, Pepper is designed to resolve simple customer queries, and will continue to learn more about AIA’s operations and the needs of its customers as she spends time ‘on the job’.
 
AIA noted that Pepper is not going to replace face-to-face interactions. Said AIA Group regional chief executive Jacky Chan, “Life insurance is a long-term contract. It is a big commitment for our customers. Therefore, face-to-face interaction is still the key.” Instead, the humanoid’s purpose is to streamline the operations at AIA Singapore’s customer service centre and make for a better customer experience.
 
AIA was not the only company showcasing its conversational AI. Active.AI is a start-up offering an enterprise AI platform for the financial services; putting it simply, it offers an AI chatbot and middleware – Triniti and Morfeus, respectively – that can be deployed on the front-end or the back-end. Using AI and natural language processing (NLP), the platform can be used to help insurers improve efficiency within the company, in addition to providing front-end customer service.
 
While this technology has existed for a while and is being used to great effect by many companies, Triniti’s strength is its ability to understand context-driven conversations and has support for many lingua franca within the region, including Bahasa Malaysia, Bahasa Indonesia, Mandarin and Korean.
 
Using AI for better UX
Not all use of AI is in futuristic voice communications with robots and virtual assistants; a lot of it is being employed invisibly, with the front-end user none the wiser. One such example is Singaporean start-up and Global Hackcelerator award winner BetterTradeOff, that created a life-planning solution called Aardviser.
 
Using a simple and easy to understand (and use) interface, Aardviser helps an agent or adviser create a plan for the customer, taking into account factors such as tax and pension rules or inflation. The programme uses advanced statistical models and AI to pull and analyse data in real-time, giving users a visual and easily digestible feed of what their needs and expenses will be like.
 
Through its AI engine, it can dynamically adjust the financial plan of the client via investment products based on financial ambition such as supporting children’s education, purchase of property and readjust after life triggers such as loss of income.
 
Knowing your customer
Using AI to streamline operations was a common thread within start-ups at the SFF. Other start-ups were using AI to analyse the large amounts of data insurers collect to identify fraud and build risk profiles of customers, as seen in the platforms built by Shift Technologies and SingleSource.
 
Shift Technologies utilises AI to parse immense amounts of primary and secondary data to provide underwriters with a ‘fraud score’, further breaking down that score into easily digestible data points for the underwriter to make the final decision. This is done in seconds and the breakdown analysis means that underwriters are able to save a lot of time when going through claims.
 
SingleSource employs similar tools for fraud detection and building risk profiles for individual clients but goes one step further by including blockchain technology. It allows customers to take control of their information by providing them with an ‘identity wallet’ and reduces the friction in the onboarding process. The decentralised nature of the blockchain improves security of the customers’ data and helps insurers pinpoint fraud, said co-founder Kelvin Chandran.
 
With this solution, insurers and banks can be more certain that they know their customer, while the customer can take comfort in the fact that their personal data is within their control.
 
Micro-transactions in insurance
Galileo Platforms is another start-up that is employing blockchain on its platform. However, it has taken a more ambitious approach, aiming to restructure the insurance industry, from its distribution to its product design.
 
Beyond the basic benefits of blockchain – security, lowering IT costs, faster transactions – one of Galileo Platforms’ most interesting offerings is the enabling of real-time transactions for purchasing and claims, on-demand insurance and micro-duration policies.
 
This ‘redesign’ of insurance offers a solution to the new global economy, which is increasingly driven by digital payments and on-demand services and products. With a customer-base that is more mobile than ever before, Galileo Platforms’ middleware helps bridge the gap between insurer and customer.
 
However, it is necessary to point out that Galileo Platforms is a technology company that is only providing the platform that allows insurers to offer these ‘micro-duration products’; the onus rests on the insurer to actually design such a product.
 
For example, Hong Kong-based start-up Wesurance offers a variety of products on its mobile app, including travel, personal accident and helper insurance. The products are easily purchasable via the app, with easy to understand terms and conditions, and generally have a flexible duration. 
 
While Wesurance does not employ any headline-grabbing technology such as AI or blockchain, it is the world’s first mobile-only insurance platform and offers a glimpse into the future of insurance in the digital age.
 
The cloud and big data
While AI and blockchain certainly took centre stage this year, the cloud and big data analytics were the underlying frameworks upon which the various start-ups built their platforms. Fancy AI robots or complicated blockchain ecosystems are basically pointless without the data to guide decisions, or the cloud to store and transfer this data.
 
In short, the ABCD of FinTech is becoming more ubiquitous in the industry. However, it does not exist as four separate blocks of technology, but one seamless ecosystem that employs any combination of the four. As these start-ups gain prominence and more parties within financial services begin to use their services and platforms, the future iterations of these platforms will be fascinating to watch. A 
 
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