The insurer in 2050:

The role of the human in

insurance’s continued fight

against financial crime

Executive summary

1950 to 2050: how will the insurer have evolved?

Step back to 1950 and insurance was driven by pen and paper, and face to face meetings. That’s a world apart from today’s connected world, where there is a wealth of insurance options available to consumers via a simple web search.


We can expect the insurance sector to become increasingly digital, with artificial intelligence (AI) becoming an important part of the insurance process - particularly when it comes to fighting financial crime.


This shift is reflected in the changing role of humans in the sector. A 2016 report from Deloitte found that the UK had enjoyed a technology-driven shift from lowskill and routine to higher-skill non-routine roles. More than 800,000 jobs were lost in 15 years – but nearly 3.5 million were created.


Insurers may not know exactly what the impact of fast-evolving technology will be on those working in the industry, but they must plan for it nonetheless.


As evidenced in BAE Systems 2019 report on how to future-proof insurance companies, we know how AI, robotics and data can be used to streamline processes, identify fraud and fight cybercrime.


But how do we ensure that the people at the centre of the industry – the workforce as well as the clientele – derive maximum benefit from these possibilities?


If we manage digital tools wisely, humans and machines will continue to work in harmony, producing something greater than the sum of its parts. And it could be that insurance proves the ideal environment for that optimum outcome.


Dennis Toomey
Global Director, Counter Fraud Analytics, BAE Systems

Step back to 1950 and insurance was driven by pen and paper, and face to face meetings. That’s a world apart from today’s connected world, where there is a wealth of insurance options available to consumers via a simple web search.


We can expect the insurance sector to become increasingly digital, with artificial intelligence (AI) becoming an important part of the insurance process - particularly when it comes to fighting financial crime.


This shift is reflected in the changing role of humans in the sector. A 2016 report from Deloitte found that the UK had enjoyed a technology-driven shift from lowskill and routine to higher-skill non-routine roles.


More than 800,000 jobs were lost in 15 years – but nearly 3.5 million were created. Insurers may not know exactly what the impact of fast-evolving technology will be on those working in the industry, but they must plan for it nonetheless.


As evidenced in BAE Systems 2019 report on how to future-proof insurance companies, we know how AI, robotics and data can be used to streamline processes, identify fraud and fight cybercrime.


But how do we ensure that the people at the centre of the industry – the workforce as well as the clientele – derive maximum benefit from these possibilities? If we manage digital tools wisely, humans and machines will continue to work in harmony, producing something greater than the sum of its parts. And it could be that insurance proves the ideal environment for that optimum outcome.

 


Dennis Toomey,

Global Director, Counter Fraud Analytics, BAE Systems

 

The current technology

state of play

 

There’s no doubt that the role of the human in insurance has changed since 1950. From helping underwriters tailor premiums to specific risk profiles, to flagging up patterns of fraud or absorbing volume queries from customers via chatbots, technology is already actively helping humans in the industry to improve processes and customer experience.


However, although the use of AI is starting to have an impact, insurance is not at the cutting edge in this space. Only 2 per cent of insurers worldwide have already seen full-scale implementation of AI in their business, revealed a 2018 Capgemini survey. A further 34 per cent considered their AI use to be in ‘ideation’ stage and 13 per cent in use-case testing.


The use of technology varies by region, not just in the case of AI. There are indications that the UK is lagging behind when it comes to getting the basics of digitised processes right. Only 59 per cent of UK-based customers said they had access to an online portal as part of their insurance policy, according to a recent survey from Consumer Intelligence. Equivalent figures were 71 per cent in the US, 76 per cent in Hong Kong and 82 per cent in South Africa.


“Insurance is a reasonably conservative industry. It hasn’t been revolutionised,” says Dennis Toomey, Global Director, Counter Fraud Analytics, BAE Systems. But market forces, he says, are pushing the sector in the right direction.


“The origins of the industry are as a big riskmanagement engine, so there have been no radical changes. But insurers are struggling to make money, so there is now a real imperative for change.”

The current technology

state of play

 

There’s no doubt that the role of the human in insurance has changed since 1950. From helping underwriters tailor premiums to specific risk profiles, to flagging up patterns of fraud or absorbing volume queries from customers via chatbots, technology is already actively helping humans in the industry to improve processes and customer experience.


However, although the use of AI is starting to have an impact, insurance is not at the cutting edge in this space. Only 2 per cent of insurers worldwide have already seen full-scale implementation of AI in their business, revealed a 2018 Capgemini report. A further 34 per cent considered their AI use to be in ‘ideation’ stage and 13 per cent in use-case testing.


The use of technology varies by region, not just in the case of AI. There are indications that the UK is lagging behind when it comes to getting the basics of digitised processes right. Only 59 per cent of UK-based customers said they had access to an online portal as part of their insurance policy, according to a recent survey from Consumer Intelligence. Equivalent figures were 71 per cent in the US, 76 per cent in Hong Kong and 82 per cent in South Africa.


“Insurance is a reasonably conservative industry. It hasn’t been revolutionised,” says Dennis Toomey, Global Director, Counter Fraud Analytics, BAE Systems. But market forces, he says, are pushing the sector in the right direction.


“The origins of the industry are as a big riskmanagement engine, so there have been no radical changes. But insurers are struggling to make money, so there is now a real imperative for change.”

Customers demand

machine-streamlined

services

 

Increasingly, insurers are turning to automation, robotics and AI to drive the efficiencies they seek. Yet it is not only costsaving that underpins this slow revolution.


Rather than seeking to eject humans from the office – and with them their salaries – insurers deploy these technologies to improve and streamline the customer experience; identify
and capture the most attractive risks; and combat criminal threats.


David Germain, Group Chief Information Officer at insurer RSA, says: “Most customers want a frictionless and speedy interaction with their insurer.


“Making a claim can be stressful. It can mean multiple phone calls asking the same questions and seeking the same information. Creating a frictionless process becomes very important and technology will always be pushed to enable those products and solutions in the industry.”


This is nothing new, particularly in direct insurance. Creating a real-time, frictionless purchase and claims process has been a priority for most insurers for years. But such progress has had knock-on effects, particularly with regard to how insurers protect themselves against criminals. 

Customers demand

machine-streamlined

services

 

Increasingly, insurers are turning to automation, robotics and AI to drive the efficiencies they seek. Yet it is not only costsaving that underpins this slow revolution.


Rather than seeking to eject humans from the office – and with them their salaries – insurers deploy these technologies to improve and streamline the customer experience; identify and capture the most attractive risks; and combat criminal threats.


David Germain, Chief Information and Technology Officer at insurer RSA, says: “Most customers want a frictionless and speedy interaction with their insurer.


“Making a claim can be stressful. It can mean multiple phone calls asking the same questions and seeking the same information. Creating a frictionless process becomes very important and technology will always be pushed to enable those products and solutions in the industry.”


This is nothing new, particularly in direct insurance. Creating a real-time, frictionless purchase and claims process has been a priority for most insurers for years. But such progress has had knock-on effects, particularly with regard to how insurers protect themselves against criminals. 

 

Creating a frictionless process becomes very important and technology will always be pushed to enable those products and solutions in the industry.

 

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Crime

fighting machines

Crime

fighting machines

People

make decisions

People

make decisions

The workforce

of the future

The workforce

of the future

New ways of

working

New ways of

working

Knowing right

from wrong

Knowing right

from wrong

Who's asking

the questions?

Who's asking

the questions?