‘AI can help Insurance Industry with Risk Management, Improving Consumer Experience’

The adoption of AI and ML has revolutionized the insurance industry in India. These technologies have been used for risk management, customer on boarding, and renewal collection, said Rajesh Krishnan, Chief Operations Officer, Bajaj Allianz Life.

When the private insurance sector found its feet in India, the players were following LIC because that was the only example in the country. And LIC did all the processes manually. Hence, in India the insurance sector started to invest in technologies quickly. Companies started investing in core systems, core applications, then came Web applications, portals, mobile applications, etc.

Q. When did the tech revolution start in the insurance industry?

As late as in the last decade or so, you can say that AI (artificial intelligence) and ML (machine learning) started picking up because people started talking about them. I would say anybody and everybody talked about AI and ML, but we’ll have to see in the context of what it does. A life insurance company such as us, I’m not talking about general insurance, primarily in the initial stages of use cases for artificial intelligence, we started investing in this because of risk management. You manage the risk well, then you make profits.

Q2. How can you use artificial intelligence and machine learning in your processes as an industry?

We were able to utilize the artificial intelligence in a more effective manner in understanding the risks of the customer, which means we were able to weed out the wrong customer and were able to ease out onboarding of the right customer. So with these models being built, we were able to predict a customer.

So risk management was the first use case, that AI was used for.

Along with that, it also helped us to collect our renewals. So renewal collection is where the money comes from, the insurance company because you don’t make money in the first year, all the profits start coming in at a later year.

Q3. Where do you think we are heading towards with these technologies?

I’ll tell you the future as we go forward is about building these models to help us develop self service in a large way. So one of the very interesting aspects of India’s demography is that. We have a pretty young population, as you know. So we have about 34% of our customers at an age of less than 19 years, another 18% belong to under 29 years. So more than half of India belonging to less than 29 years means whatever has worked for our generations in the past is not gonna work in the next generation because the expectations are very different.

Q4. How has COVID changed things for the insurance industry?

COVID was a great tailwind for us. Suddenly, everybody felt that, you know, there is something called “unpredictable eventuality”. It can happen to anybody and I need to be prepared. But just like every other newspaper headline in our industry, this also has been forgotten because new headlines have already taken over.

Yes, for sure. It’ll take away jobs and what kind of jobs will it take? It will take away jobs which are non-value add. A good analogy I can give you is that if you walk into a departmental store, there is a security guard who will ask you to produce a bill and he will put a stamp or he will tear it. Now the question to ask is, is it necessary? Will AI take away that guy’s job? Yes, for sure.

If you focus more on value adding activities, there are jobs for everybody, and that can only be done by a human mind to comprehend.

Now I’m going a few years forward and I’m just visualizing what could happen.

So of course, and the good part of machine learning is that machine learning coupled with AI can have self learning and the learning has to be the right learning.

AI to me, there are two big use cases – one is it weeds out inefficiency from the system, and weeding out inefficiency means better risk management for an insurance company – better bottom line, better value for my customer. AI can help my customer navigate my website better, for example, when someone comes to the website, AI can pre-empt what they are looking for; it more or less can predict based on your behavior or it can nudge and tell you hey rakshita looks like you have shifted your office. Would you like to update an address here?

Courtesy : https://www.livemint.com/industry/ai-can-help-insurance-industry-with-risk-management-improving-consumer-experience-11701081173258.html

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