Talking AI, sharing economy and smart homes at Dig In

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Day two of Digital Insurance’s Dig | In: The Digital Future of Insurance Conference featured 15 breakout sessions covering all corners of insurance’s reinvention. Read on for some expert insight.

Smart home devices: Getting customers to buy in

Nearly half of the claims presented to AIG’s high-value Private Client unit are related to water damage, according to Ian Davies, head of personal property underwriting, EMEA, for the company. One client experienced a million-dollar loss in their luxe Manhattan apartment. AIG offered to install, for free, leak detection technology during the repair. But despite her recent experience, the client balked.

“Only about 26% of our clients take us up on the offer” for free technology, Davies says. “But we want to make safer homes. We have to get far better at marketing what we can do for the customer.”

While detecting moisture changes that can indicate a future problem is nice, Assaf Wand, CEO and founder of Hippo Insurance, says that the most important data point related to smart home technology is just the simple fact that it’s installed and functioning. As nice as it is to know if moisture levels are rising and a leak could be forthcoming, he explains, the fact that the customer cares enough to install the device – and its requisite safety features – means a lot.

“It’s actually using the product that is a lot more important than the data aspect,” he says. “The interesting part is whether is it used correctly, is it on, or that people are keeping the battery fresh.”

Chatbots and AI: Customer experience challenge

The biggest challenge ahead in leveraging chatbots for the customer experience is improving AI beyond natural language processing to understand complex speech. So too is convincing carriers to adopt the technology.

“Insurance is a great place to test chatbots,” says Miguel Fernandez, founder of Claimbot. “AI bots can live within Facebook or other chat applications already on customers’ phones without a need to download an additional app. That’s why I bet on this industry.”

Fernandez and fellow panelists Ben Case, lead cognitive solutions architect of IPsoft; and Kunal Contractor, director of Avaamo; believe chatbots will not replace insurance agents in the future. Instead, they will ride shotgun to agents. Even so, carriers should adopt an 80%-20% approach where the majority of call center cases are handled through AI while more delicate scenarios are sent to humans directly, panelists said.

“The goal is not to replace agents. In some instances human involvement is necessary,” said Contractor. “Once you have insurance policy, you can deal with bots that know your information.”

Sharing economy: Still an industry in flux

The sharing economy presents both ample opportunity and large headaches for insurance carriers trying to underwrite agile coverage for new forms of risk.

“The issue is these sharing economy companies are not static,” said Mariel Devesa, head of product innovation at Farmers Insurance. “There are 50 [companies] today and there will be 500 tomorrow in every flavor of a sundae.”

On a more positive note, panelists—including Tim Attia, CEO of Slice Labs, and IBM’s Global Insurance Director Mark McLaughlin—believe blockchain, predictive analytics and mobile can be leveraged to not only help carriers clear up liability concerns, but also anticipate risk while delivering products to customers in a simple manner.

Innovation is key in dealing with today’s unique risk profiles of the modern consumer, panelists conceded. As an example, a customer can be a user of Uber, Zipcar, Hertz and have a personal auto policy to boot; meaning it’s difficult for the customer, much less the insurer, to understand their risk.

“We came in with a blank sheet and knew ahead of time we would need to write policies for all these variables,” said Attia, referring to both Uber and Airbnb as examples. “But we can’t be traditional about how we sell. If you want to push a button and turn on coverage, we can’t do five forms, have you dial into a call center and make you wait two weeks.”

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Internet of things Sharing economy Artificial intelligence Connected home AIG Farmers Insurance Slice Labs