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Virus injection – tech talk accelerates in the midst of upheaval

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An internet meme that has done the rounds depicts a survey asking “who led the digital transformation of your company?” Of possible choices between the CEO, CTO and COVID-19, it is the virus that’s heavily circled by a thick red line.

Sydney-based Genpact APAC Insurance VP Steven Raynor says organisations are still coming to grips with the changes triggered by the pandemic, but there’s no doubt there has been a surge in interest in digital technology that is potentially far-reaching.

When it comes to immediate impacts, the virus has led to consumer panic buying of everything from exercise equipment and toiletries to pets. It has also changed driving patterns, sent workforces home and transformed communications and workforce collaboration.

The extent to which businesses return staff to offices is still unclear, with implications for transport and the ways in which cities operate, as virus repercussions remain in flux.

Insurers as a result are examining the changing behaviours and shifting cover needs of their customers, and how the industry should respond. The circumstances have made it more difficult to rely on past patterns and processes for underwriting and other decision-making, while highlighting potential benefits from new approaches across businesses.

“The reality is every organisation we are talking to is talking about digital transformation,” Mr Raynor told insuranceNEWS.com.au. “In times like this people need more and more insight and more data.”

Trends that may accelerate include the greater use of third-party data that can provide detailed risk information. For a particular home that could include details about its construction, whether it’s on a sloping block, or surrounded by trees.

“There is much more data you can buy these days that can really enrich underwriting decisions, and I think that will become more and more important as the things we have relied on the past have changed as a result of [the pandemic],” Mr Raynor says.

The surge in interest in technology also requires a thorough examination of existing processes to remove inefficiencies, if an insurer is to deliver greatest benefits as part of a wider transformation, particularly with automation advances such as artificial intelligence (AI).

Discussion around AI has raised concerns over algorithms and in-built biases, but Genpact, a global professional services firm, says there is also an increasing focus on “augmented intelligence”, which highlights using technology to assist staff so they can focus on higher-value tasks, rather than replacing them.

That requires training so employees are comfortable with the technology, and to make sure changes are beneficial in assisting personal interactions with customers, particularly in sensitive areas such as claims handling.

“There is a time and a place for digital technology but equally in our industry we have the privilege of dealing with people in their hour of need, and often when people are quite emotionally affected,” Mr Raynor says.

“The reality is I can’t think of many examples in a claims process if you have suffered a loss, where you would want to talk to a machine.”

Looking further ahead, Genpact flags opportunities for insurers to enhance their role by moving beyond collecting premiums to becoming more proactive in providing advice for customers, in a focus on claims prevention.

Mr Raynor says such a move builds on the importance of putting consumers first, as highlighted by the Hayne royal commission and which has been a theme picked up more widely by regulators.

“Society’s expectation around the insurance industry and financial services more broadly is that they should have a strong focus on protecting and looking after consumers,” he says. “A natural extension to that is moving more to prevention.”

Examples include taking advantage of the data offered by increased use of the Internet of Things, which can provide input on heat risks, water leaks or even whether a door may be unlocked.

There’s also scope for loss data for sectors and details on major events to be shared broadly by the insurance industry to customers, alerting them to risks that have affected similar businesses.

“That can only be a good thing for the industry and for the policyholders as well,” Mr Raynor says. “A lot of businesses have no idea about the risks in their businesses until a claim happens.”

How far down the track the industry wishes to travel on various scenarios remains to be seen.

The coronavirus has kick-started digital and technological reviews among many businesses, but the extent of real transformation will depend on many factors, including the enthusiasm of boards, senior leaders and staff.

If it’s to be a success, that red circle in the meme, in any real survey, will need to move away from the virus as the catalyst.