Insurance

Discover great opportunities and innovative solutions to add value to the customer experience in the insurance industry.

Introduction

The whole business model of insurance companies around the Middle East is going to change. Insurance companies will need to shift into advisory services and provide proactive and personalized services.

The insurance sector has been a focal point in the Middle East for the last decade, however, now it is going through a massive transformation. The COVID-19 pandemic put a big challenge on banks, creating a sense of urgency and adding lots of financial pressures. Changes in consumer behaviors, digitization and emerging technologies increased the complexity of the insurance industry and the demand for realtime interaction as well.

The insurance sector across the Middle East has been intensified by the governments who push for digital transformation to better serve the customers in the times of the pandemic. As a result, many financial services entities within the region acquire and invest in the technology business.

Source: The Age of With™ Accelerating the impact of augmented intelligence in insurance, 2019

Key Challenges

How Insurance Products are Sold, Serviced and the Usage of Customer Data

Insurers have been offering general products under one-size-fits-all philosophy while they have been traditionally known for the face-to-face interaction which has been halted. Insurance companies collect huge amounts of data that remain underutilized for further analysis of the customer’s needs.

Incomplete and Shifting Information

The insurance has traditionally been built on incomplete information. Subjects with similar but unknown risks are put together, and are charged with a fixed premium to cover future liabilities, based on uncertain probabilities. This has been intensified with the spread of the COVID-19, where the information is not only incomplete and uncertain but also is shifting as a result of the constantly changing governments’ measures.

Vulnerable Customers

Many insurance customers are under financial pressures due to job losses, income reduction or no income. They are also in more need of financial and medical support. Other customers will be opting for reducing their spending by not choosing to purchase new policies, renewing their current ones or renewing them with reduced coverage. Insurance companies under pressure to balance between achieving financial performance and providing community responsibility to the vulnerable customers.

Reduced Mobility, On-Hold Projects

As customers stay at home, the need for certain policies such as vehicle and travel insurance have been reduced. As many construction projects are on-hold, there is no need for construction insurance.

Paper-Based Environment and Legacy IT

In the insurance sector, the communication is heavily paper-based and many processes are still manual. However, the need for digital solutions has been increased during the pandemic. Most of the insurers have a legacy IT infrastructure that doesn’t allow the integration of processes, which is hindering the ability of these insurers to respond to this challenge.

Skills Gap and Talent Strains

Many talents from insurance companies are not skilled to work in digital environments and they are put under strains to work remotely. However, they have no access to the needed information as they are not allowed to visit the physical premises.

Opportunities

Digital transformation is about strategy, culture and talent development. It is about employees with digital mindsets, who are rethinking business models while being agile and fast.

There is a need for developing Technology/Digital Savvy and data literate talents who can

enable innovation
better analyze and visualize customers’ data, needs and behaviors
integrate Big Data into the decision making processes
develop new products that can better meet customers’ expectations

Insurance companies need to

add more value to their customers through enhanced communication and personalized products/services. While one of the most prevalent obstacles in the insurance industry was the reluctance of the customers to share personal data, now with the COVID-19, this is changing as customers are willing to share personal data for the sake of enhancing their customer experience
work on the key principles which fortify customer relationships: integrity, resolution, expectations, time and effort, personalization and empathy

There is also need

for operational enhancement projects
to modernize the internal legacy IT systems
to digitize the exchange daily operations of data
to forecast and identify the customers who will be mostly affected by the fragile economy
to recognize the correlation between the operational improvement, the digital enablement and the customer experience

Source: COVID-19: Customer and Digitization in Insurance, KPMG, 2020

Solutions

Big Data Solutions

Huge amounts of data about the customers could be used to gain insights that could be integrated into decision making. Big Data Solutions, such as Hadoop and Tableau, will enhance the data quality and provide accessibility to structured and unstructured data sets.

Analytics

Analytics could be used to measure the satisfaction of the customers and satisfy their future needs. Predict the customers who will be defaulting on payments and/or cancel their insurance policies and enable insurers to come up with innovative services.

Artificial Intelligence Solutions

AI Solutions could be used by the insurers to improve the business operation and enhance the customer experience via chat-bots and fraud/risk features.

Digital Platforms

Digital platforms could be used to provide various channels to communicate and engage with the customers, which will in turn collect information to feed to the analytics. Also, there is the option of the Integration with a government-led COVID 19 tracking app to collect real-time data about the medical conditions of the customers.

Other Technologies

The private block chain could be used for only invited users who are allowed to participate, see, share and use information. This could be used to share information about insurance policies for administrative purposes and payment of claims. Cloud- based technologies could be used to provide 24X7 accessibility to the databases and information of the customers.

Intelligent Automation Tools

Intelligent automation tools could also be used to automate tasks within the daily operations across departments, or at least to digitize the business processes in order to enable the employees to handle their duties in serving the customers virtually from anywhere.

Insurance Sector Talents

Agile thinking is needed to reduce the sophistication of the processes and increase the pace of development. Moreover, Blue Ocean training would assist in enhancing the mindset and the culture to become more digitally oriented.

Source: Digital Banking in the Gulf, McKinsey, 2016

Source: AI in the Middle East, Hansson Robotics, 2018

Benefits

As a result of Automation and Applying Cloud Technologies There Will Be

As a Result of AI and Chatbots Solutions

insurers will realize a reduction in the distribution costs

customers will be able to receive personalized service and advice

costs will be more optimized as the availability of more accurate data will enable the insurers to price the services and products more accurately and will result in more informed decisions which will in turn result in risk reduction