VR, AR, AI Become a Significant Part of Insurance Industry

Among the highly conservative industries, when it comes to the use of advanced technologies, the insurance industry is close to the top. How it adjusts to today's changes, that have been growing bigger and faster, we spoke with Josip Kljaković Gašpić, head of the Innovation and Development Department of Wiener Insurance. In the interview for ICTbusiness.biz and ICTbusiness.info he has pointed out that there is an innovative model that has proved to be successful in practice, and that is the close co-operation of insurers with IT professionals from the IT industry, such as InsurTech and FinTech, and are increasingly used in expanded reality and automatic image analytics.

According to him, digitalisation of complex and layered products and processes requires greater resources and for this reason a large part of the proactivity of the insurer in the upcoming period should be based on simplifying products and processes in order to relieve clients, employees and business partners.

The Insurance Industry is very conservative. However, today, everybody is talking about digital transformation. What does that mean to you?

Digital transformation, especially in the mid-term period, has great importance. In order to stay successful, we have to offer concrete products with top user experience to our clients. Digital transformation enables us to do just that: on one hand, it saves money and keeps competitive prices. On the other hand, it provides a more quality relationship with the client. At the same time, new opportunities arise that allow the creation of new services with added value.

Innovations are rare in The Insurance Industry. What is possible to achieve today, thanks to information technologies (IT)?

In our core business of taking on risks, conservatism is a virtue which keeps us from business turbulence.

However, there is an innovative model which showed itself useful in practice, and that is close cooperation with tech experts in The IT Industry. For example, InsurTech and FinTech in which the insurer takes up the role of early adopters, that is early acceptors of new technologies. For example, in the process of dealing with claims, the combination of remote damage assessment (applicable support for survey of damages without going out in the field), augmented reality (virtual reality for reconstructing incidents) and image analytics (automatic picture processing with the purpose of preventing frauds and defining adequate damages) can significantly reduce the time of dealing with claims, achieve meaningful savings and increase client satisfaction.

How is the data being used? Big Data Analytics has been around for ages, today we encounter Machine Learning, Deep Learning, AI?

Math models which predict uncertain future events based on back data have been implemented in the core of insurance business models for centuries. The advance in technology, especially the growth of computer power and rise in quantity od available data, has enabled those models to develop in the mentioned direction. For instance, Predictive Analysis is already being used regularly in the insurance admission process, in order to quickly and without human intervention, determine consistent and reliable risk levels of each insured object.

How to even be proactive and answer big user requests, in a strictly regulated industry which is being pressed by FinTech companies?

I believe that one of the key preconditions for success in this environment is the simplification of products, processes, work organization and all other factors. Clients expect easy to understand products and equal user experience. Complex product regulations imply greater demands. The digitalization of complex and layered products and processes calls for greater resources. That is why the major part of proactive insurer activities in the forthcoming period should be based on product and process simplification with the goal of the client, employee and business partner unburdening.

What are the key technologies and solutions which you see dominating The Finance Industry in the coming years?

Key technologies, like API services and ecosystems, will enable connectivity and availability alongside processing big amounts of data from different sources (CRM, predictive models). Together, they will lead to a user experience transformation (e.g. paperless business) and lower costs (e.g. robotization).

Can a huge twist be expected on the market as is happening the banking and card sector in which everyone today wants to get into?

Continuing the insurer consolidation trend through takeovers and mergers is to be expected. In the cases of new insurers appearing, I expect them to mostly be niche players. With an exception of the insurance distribution, for which I predict major changes, especially if the existing insurers won’t accordingly digitally transform.