check payments. Virtual payment solutions also help protect your company
from the risk of payment fraud. Seventy-four percent of U.S. organizations
were the target of check fraud last year,
according to a recent survey of finance
and treasury professionals. By moving
away from paper-based payment to a
digital solution, insurance companies
can avoid financial exposure and reduce
4 Artificial intelligence (AI) is howing strong potential to
reshape processes for insurance
claims, distribution, underwriting
A McKinsey report shows tools such as
computer vision and natural-language
• Create a personal risk profile for pol-
icyholders by analyzing their public
online photo galleries, such as their
Facebook or Instagram feeds.
•Act on customer service requests
without the use of human intervention.
• Use emotional intelligence capabilities to sense when a customer is unhappy and immediately connect the
policyholder to a human agent.
The impact for insurers is significant:
AI has the potential to eliminate fraudulent claims, which cost the industry $40
billion per year, according to the FBI.
Common causes of fraudulent claims
include embezzlement of insurance pre-
miums, workers’ compensation fraud and
disaster fraud schemes. Meanwhile, 74%
of consumers say they would be open to
computer-generated insurance advice,
which offers the potential for personal-
ized service at reduced cost.
5 Telematics is gaining a strong foothold in the insurance
industry, especially when it comes
to auto insurance.
Globally, growth in the use of telematics
in the automotive industry is expected to
reach $17 billion by 2021, with some national auto insurers offering discounts to
policyholders who allow digital devices
to track their driving habits and demonstrate safe driving habits.
Monitoring the behavior of policyholders through telematics enables insurers to
better understand their risk pool, with
data that track the time of day drivers
typically operate their vehicles, how well
they make right and left turns, their average speed, how fast they accelerate after
stopping at a red light, and more. It also
encourages policyholders to change their
behavior based on the driving “grades”
they receive (typically, each month).
Two years ago, a Pew Research Trust
study found 45% of consumers would
not find the trade-off of personal driving
habit data for car insurance discounts
appealing. But recent trends point to a
change in consumer mindset and a push
toward increased adoption in 2018.
Designing a higher-tech
In an era of consumerism and increased
competition, it’s critical that insurance
companies consider the right approach
to digital innovation — one that reduces
costs, enhances consumer engagement
and satisfaction, provides increased in-
sight around the populations they cover
and helps avoid financial risk.
There are four steps insurance companies
can take to design a high-value approach to
digital innovation, according to EY:
• Find ways to link high-quality cus-
tomer experiences to both processes
and enabling technologies.
• Design offerings that emotionally engage customers at key points in their
• Use analytics to gain key insights on
your customer population and adjust
your approach to digital innovation
based on their needs.
• Track technology trends that affect
consumer behavior — both digital
and non-digital — and use these insights to continually enhance and redesign your approach.
Taking the time to separate the glitz of
new innovations from technologies that
best match your company’s needs in the
areas of claims processing and more —
now and in the future — will best position your company for success in a digital
Jeffery W. Brown (jbrown@vpayusa.
com) is president of VPay, a turnkey
claim payments platform focused on
the property and casualty, workers’
compensation, healthcare and warranty
industries. He regularly works with
legislators and regulators around the
country on data and security issues
and emerging payment technology
applicable to the insurance industry.
INSURERS THAT CLING TO TRADITIONAL WAYS OF INTERACTING WITH
CONSUMERS RISK BECOMING OBSOLETE IN THE FACE OF CHANGING MARKET
DYNAMICS, ACCORDING TO AN EY WHITEPAPER