Maximising the insurance experience through AI and the cloud

By Bryan Hamman, Regional Director for Africa at NETSCOUT

Insurance clients today are more likely to consider a provider if it consistently offers seamless quotes, efficient claims processing, ongoing customer support and targeted communications. To meet these demands, insurance companies must safely make use of data and new technologies, or risk being left behind by their competitors.

Personalisation and optimisation are critical elements in maximising customer experience, both in retaining existing clients as well as attracting new ones. In this context, how are insurance companies using new technologies to better meet and service their customers’ expectations?

Part of the answer lies in cloud adoption and the use of artificial intelligence (AI), and it’s here that the use of ‘InsurTech’ – technology innovations to bring in savings and efficiency to the insurance industry model – is playing a critical role. InsurTech includes the use of AI, big data analytics and machine learning (ML), to improve and automate the insurance sector.

Data, AI and the cloud: partners in personalisation

The insurance arena is enabled by advanced data analytics and customer-centric underwriting in personalising the customer experience. The strategic use of data can provide a deeper understanding of individual customer behaviours, preferences and risks, and thereby improve the insurance experience. Insurers are therefore tapping into a variety of sources, including social media interactions, IoT device data and mobile information, to offer personalised services.

However, insurance companies must put the correct foundations in place regarding their IT functionality and build systems to extract the required data that supports hyper-personalisation.

For example, with regards to marketing and distribution, large language models, which are cloud-enabled, can personalise insurance messaging for specific customer personas, enhancing engagement and conversion rates. In addition, smart chatbots provide 24/7 support, while their feedback helps insurers to identify, calculate and price risks more accurately.

Moving essential business applications to the cloud can help the insurance sector to gain access to the maximising benefits of AI, which is increasingly being used to improve customer experience and internal processes.

According to a recent survey by global management consulting firm McKinsey & Company, which analysed data from more than 50 major African businesses, the participants reported having, on average, around 45 percent of their workloads in the public cloud. While based on a relatively small sample size, this is encouragingly on par with, or ahead of, the rates of adoption in North America and China.

According to the McKinsey report, early indications also showed that African organisations are moving quickly into the cloud, with no signs of slowing down. This promising cloud adoption trend will benefit insurance organisations across the continent.

AI and the fight against insurance fraud

According to insurance infrastructure provider Curacel, which operates in a number of countries across Africa, the insurance industry across the continent is currently losing more than $700m to fraud annually. Against this background, Curacel notes that AI and ML technologies are developments that many insurers are using to help solve this problem.

As an example, Curacel reports that in the health insurance space, an ML application named Anomaly Detection is used, which works by analysing genuine claims and then creating a model of a typical claim. This model is then applied to large data sets to detect further anomalies and pinpoint potentially fraudulent claims that may arise.

In South Africa specifically, the Association for Savings and Investment South Africa (ASISA) noted that, while local insurers lost R77 million to fraud in 2022, it also prevented losses worth R1.1 billion – due, in part, to preventative measures like big data, ML, AI and enhanced authentication.

With insurance fraud representing a long-standing blot on the industry, it is heartening to note that AI is helping to improve operational efficiencies and effectiveness in this ongoing war against insurance organisations and their honest clients. Happily, on the other side of the scenario, AI-powered claims-processing tools are also streamlining the claims process for genuine claims.

The importance of network visibility in digital insurance

Network visibility is a major component for insurance companies seeking to offer a transparent and secure customer experience. By monitoring traffic and data at the packet level in real time, insurers can detect and quickly respond to network performance issues, as well as anticipating and mitigating potential security risks. For example, good network visibility can prevent service interruptions by detecting behavioural anomalies that could indicate potential network failures, latency, slowdowns, bottlenecks, or even malicious activities.

Additionally, the data obtained through network traffic analysis is indispensable for ensuring smooth operations and improving real-time decision-making. This is particularly important in scenarios where network performance can directly affect critical processes, such as claims processing or real-time risk assessment.

Ultimately, success in the insurance sector increasingly relies on the harmonious and strategic integration of digital solutions that enhance internal management while enriching the customer experience. AI has an important role to play in unlocking the true potential of the insurance sector in Africa.

By empowering personalised underwriting and risk assessment, and combating fraudulent activities, AI is well-positioned to keep the industry moving forward.