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  • user 10:13 pm on March 1, 2017 Permalink | Reply
    Tags: , , insurance,   

    Three Steps to Adopt Artificial Intelligence in Banks and Insurance 

     

    Today, there is incredible interest in anything that is even remotely related to (AI). AI is dominating the conversation on a variety of levels. Philosophers and thinkers are debating the moral implications and risks for human kind of a world where intelligent machines are ubiquitous. In the media, it seems that a new movie or TV series on AI is launched every month. Academic papers on the topic are receiving attention from far beyond the scope of the usual research audience. In the meantime, businesses are facing much more short-term and concrete decisions about what to do with AI, where to invest first and how to measure the return of these investments.

    In this post, I will try to define a framework for how to structure decisions about AI adoption. To do so, I will focus on a sector that for different reasons is an early adopter: Banking and .

    As with any innovation, it is very important that established organizations focus first on selected “easy wins” or incremental change instead of disruptive change. This is a solid approach for several reasons. It gives you the chance to take advantage of some concrete benefits in the short term, which helps mitigate internal resistance, and it provides a view of the innovation’s full potential.

    For these reasons, using AI to increase automation for certain operative tasks is a great way to start.

    The daily operations of Banking and Insurance companies contain a number of repetitive, human error-prone processes that make them a perfect target for initial adoption of AI. Here, you have the added advantage that, even if you decide to start small and with only partial automation, the ROI could be staggering because these are typically high-consumption processes in terms of resources and costs.

    Let’s consider some processes that are common to both industries that fit these requirements. Customer care and e-form extraction (reusing data taken from electronic forms), or banking-specific processes such as mortgage approval (moving data from different documents into a central repository to do calculations) or fraud detection (tracking account activities, communications, connections etc.) are processes that are ripe for automation. In insurance, this includes processes such as claims management, new policy quotes, or the technical due diligence required for a new commercial policy.

    In processes like customer care automation or claims management, you can achieve significant savings even if you limit the scope to partial automation. In addition, the standardization often brings improvements for “soft” metrics like customer satisfaction. Each manager knows how many resources are dedicated to these tasks, so the potential ROI would be easy to calculate. A collateral benefit is that resources and people freed from these activities can be assigned to higher value tasks, such as sales-related activities that focus on growing the top line.

    Once the organization has experimented with the initial adoption of AI by focusing on high ROI initiatives linked to incremental improvement, it’s time to focus on the areas that can bring the most strategic value. This is what AI was made to do.

    The MIT Sloan Management Review recently published an article where they try to get at the core of what AI can really provide. They compared AI to the advent of the computer. The authors make the case that, even if the computer brought drastic change to basically everything, the real transformative element was the improvement in calculation.

    For AI, the elements that will bring about real change are scalability and cheap prediction power. Once automation is out of the way, these are the areas where organizations should start focusing.

    Banking and Insurance companies could make a smooth transition to AI-enabled predictions by starting to leverage data made available by the automated processes. For example, a side result of customer care automation is an increased set of analytics about your customer. Frequency of communications, the topics discussed, customer reactions to the marketing message, etc. are quantitative and qualitative data that can help in creating (again through AI and machine learning algorithms) models to predict customer behavior such as propensity to churn or to buy, to promote with peers, etc. Similar benefits can be achieved with processes such as claims management or technical due diligence for new policies.

    Organizations that have gone through the initial steps of adoption will be ready for the third more disruptive step. Let’s go back to the computer example from the MIT article. The majority of people who were in awe of the computer completely ignored or dismissed the larger impact that this speed and precision in calculation would have on us in the future via the  internet, e-commerce and free video phone calls.

    With AI, we are at the same stage of computers in the 70s. The most disruptive effect for organizations will be in the appearance of new business models, especially in the most traditional sectors (just as retail and telecommunications were among the core sectors disrupted by the evolution of computers).

    Going back to our focus on Banking and Insurance, while these organizations are going to be busy going through the first two steps in AI adoption, it is important to not forget about the big changes that are coming. For example: What will autonomous driving do to insurance? What would highly accurate algorithmic predictions of movements in the financial market (for example considering unstructured data like news, social feeds, etc. in addition to stock price fluctuations) do to ? What will perfect weather forecasts do to banks and insurance companies? No matter how advanced a company is in adopting automation or in experimenting with prediction, not paying attention to these next aspects of AI will be a death sentence for any business.

    AI adoption will be about competitive strength first and business sustainability later. As some of the early adopters of this , Banking and Insurance companies must ensure that they have a strategic framework in place to support the full cycle of these changes. If they drive this adoption through smart, incremental and forward-looking tasks they have a good chance of obtaining both short and long term gains.


     
  • user 12:18 pm on January 8, 2017 Permalink | Reply
    Tags: conflict, , General, , insurance, , , ,   

    Solving the conflict of interest in General Insurance; The state of the industry (Part I) 

    In my previous role at Barclays Investment Bank, I got to work with leading insurers and companies, shaping their future strategy&;

    Continue reading on hackingfinance &187;

    Bank Innovation

     
  • user 12:18 pm on December 11, 2016 Permalink | Reply
    Tags: , , , , insurance, ,   

    Insurance Helps Bitcoin Become Safer for Mainstream Consumers 

    Bank depositors get tax-payer funded in many jurisdictions (such as FDIC in America) in case a bank goes bankrupt. Your in Mt.Gox or BitFinex….buyer beware. People paying by Credit Card can fight back against a fraudulent charge. Once you send those Bitcoin it is like handing over cash…buyerRead More
    Bank Innovation

     
  • user 12:19 pm on December 3, 2016 Permalink | Reply
    Tags: Agent, , CoverWallet, Define, insurance, ,   

    CoverWallet Could Define the Insurance Robo Agent Space 

      InsurTech is in its Cambrian Explosion phase, with lots of new ventures being created. However, we all know how tough the Series A Crunch is (data hounds can get their fix from Pitchbook, which shows 1,891 Angel/Seed rounds going to only 647 follow on deals). So we pay attentionRead More
    Bank Innovation

     
  • user 12:18 pm on November 29, 2016 Permalink | Reply
    Tags: , , insurance, ,   

    The Future of Blockchain and Insurance One Year Later 

    During January 2016, we published What does the hold for and ? About one , this post looks at what happened during 2016 and what is likely to happen in 2017. The January 2016 post explains the value thesis of Blockchain in Insurance. It also mentions 5Read More
    Bank Innovation

     
  • user 12:18 pm on November 19, 2016 Permalink | Reply
    Tags: , , insurance, , , ,   

    Three Market Opportunities In Insurance Asset Management 

    The side of business is a sleeping beauty that hasn’t awoken to the drumming. Apart from the regulatory driven involvement due to Solvency II ( covered here) I have not seen any laser focus from Fintechs in the asset management part of insurance businesses. Naturally, lowRead More
    Bank Innovation

     
  • user 12:19 pm on November 12, 2016 Permalink | Reply
    Tags: , , , insurance, , Root, , ,   

    Root Insurance And the Unbundling of the Insurance Stack Using Open APIs 

    It took a long time for startups to become full regulated . This is happening much faster in because Insurance is a stack with three layers and tech centric players understand stack dynamics in their bones and know how to build a sustainable position within a stack.Read More
    Bank Innovation

     
  • user 6:22 pm on November 8, 2016 Permalink | Reply
    Tags: , , , , , , , insurance, , , ,   

    Upcoming Swiss Hackathon Seeks To Use Blockchain To Disrupt The Insurance Industry 

    An organized by EPAM in collaboration with Finance + Association  and Validity Labs is looking for innovative solutions to the .

    Upcoming Hackathon Seeks To Use Blockchain To Disrupt The Insurance Industry

    Image credit: Golden Bitcoins by Julia Tsokur via Shutterstock.com

    The EPAM 2016 Blockchain Hackathon, taking place on November 18 and 19, 2016 in Zurich, is seeking dynamic teams to take on the challenges set by the three largest insurance companies in Switzerland, namely SwissLife, Zurich and SwissRe.

    &;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;

    Apply for Blockhain Insurance Zurich Hackathon

    You still can apply for it or join as a visitor, hurry up!

    &8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;&8212;

    The teams will be judged by representatives from these three companies on the following criteria: originality and innovation, usefulness and practicality, business potential and commercialization to go to market, design and interface, and technical implementation.

    Industry experts will assist the teams during the hackathon to provide insights and answer questions about specific industry characteristics.

    Insurance and Blockchain?

    Like , insurers have been exploring the merits of blockchain technology to disrupt their industry and streamline payments of premium and claims.

    According to a Deloitte paper, blockchain technology could support the significant digital transformation underway in the industry because much of this transformation relies on data.

    &;Smart contracts powered by a blockchain could provide customers and insurers with the means to manage claims in a transparent, responsive and irrefutable manner,&; the report states.

    &8220;Contracts and claims could be recorded onto a blockchain and validated by the network, ensuring online valid claims are paid. [&;] Smart contracts would also enforce the claims &; for instance, triggering payments automatically when certain conditions are met (and validated).&8221;

    Blockchain technology could allow the industry as a whole to streamline its processing and offer a better user experience for customers. Storing claims and customer information on a blockchain would also cut down fraudulent activity.

    Early blockchain developments have tended to focus on optimizing current ways of working within organizations. For instance, London-based startup Everledger uses the blockchain to create a permanent ledger for diamond certification and related transaction history. The ledger lets insurers and potential buyers check the history of any individual stone, helping insurers prevent, detect and counter fraud.

    Blockchain Industry Challenges

    Despite the enormous potential, the biggest challenges to industry-wide implementation are facilitating collaboration between market participants and technology leaders, succeeding in the operational transformation, and shaping a stimulating regulatory environment, according to McKinsey and Company.

    EPAM Systems is a leading global product development and platform engineering services company and one of Forbes&; 25 Fastest Growing Public Tech Companies.

    Validity Labs, a startup created by several blockchain technology experts in Zurich, aims at bridging the shortage of educated blockchain engineers, entrepreneurs and executives. The company organizes various educational events and workshops in Switzerland.

    Swiss FinteCH is an independent association aimed at promoting and supporting Switzerland&8217;s industry. It connects stakeholders, creates research papers, advocates for solutions and promotes Switzerland as a global fintech hub.

    The post Upcoming Swiss Hackathon Seeks To Use Blockchain To Disrupt The Insurance Industry appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.

    Fintech Schweiz Digital Finance News – FintechNewsCH

     
  • user 3:35 am on October 29, 2016 Permalink | Reply
    Tags: , , , insurance, Investigates, Mutual, , Sigma, ,   

    A Comeback For Mutual Insurance? Swiss Re Report Investigates Six Sigma and Digital Technology 

    The sector has undergone a modest recovery in recent years, says Re&;s latest   &;Mutual insurance in the 21st century: back to the future?&; Mutual insurers&8217; share of the overall insurance market increased from 24% of direct premiums written in 2007 to just over 26% in 2014, reversing some of the declines of previous decades. However, the segment faces challenges, including adapting to new risk-based capital requirements and more stringent corporate governance arrangements, which could put some mutuals at a competitive disadvantage.

    sigmaFurther, mutual insurers must embrace technological disruption. Exploiting such as smart analytics and social media should allow mutuals to better serve the interests of their member-owners, while their ownership structure should enable mutuals to keep insurance affordable for some individuals and risks.

    The primary purpose of mutual insurers is to provide risk protection coverage for its owner-members, rather than to make profits or provide returns to external shareholders as in the case for stock-based insurers. Over the past few years, cumulative premiums written by mutual insurers have outpaced those of the wider insurance market, with much of the outperformance concentrated during the height of the financial crisis in 2008-09.

     

    &8220;That mutuals&8217; relative premium performance did not reverse once economic growth resumed after the financial crisis, suggests a degree of permanence to the segment&8217;s recovery,&8221; says Kurt Karl, Chief Economist at Swiss Re. &8220;Some mutual groups have expanded internationally in recent years, and new mutuals have been established in a number of markets, another indication of the segment&8217;s renewed popularity.&8221;

    However, while mutuals&8217; share of the global insurance market has increased modestly since 2007, it remains well below previous highs. For example, in the life sector, the share of global premiums of life mutuals was 23% in 2014, well below levels of around 66% in the late 1980s and early 1990s before a wave of demutualisations in a number of countries.

    sigma4_2016_fig2

     

    New challenges
    Mutual insurers face a number of challenges. The most obvious comes from new risk-based capital requirements and tougher corporate governance arrangements introduced by governments and regulators, designed to boost the resilience of individual insurers and curb excessive risk taking. These requirements could put some mutuals, especially smaller ones with a narrow regional or business line focus, at a competitive disadvantage. Larger and better-diversified insurers are in a stronger position to manage the additional operational and funding costs associated with compliance.

    Regulators appear alert to the possible unintended consequences of their new rules, and emphasise proportionality in implementing the new prudential (i.e. capital) and governance regimes. There has also been a renewed focus on the range of capital solutions available to mutuals, including legislation in some countries to allow equity-like capital instruments to be issued, such as certificats mutualistes in France. Together with customised reinsurance solutions and alternative risk transfer mechanisms such as insurance-linked securities, this will give mutuals increased financial flexibility to grow their business and compete with other types of insurers.

     

    Embracing digital technology
    Digital technology is changing the way that insurance is designed, priced and sold, and is fundamentally re-configuring the competitive landscape in which all insurers operate. Mutual insurers must adapt and upgrade their underwriting and distribution practices if they are to remain relevant in the digital age. There are signs that many are actively embracing such change, but some mutual insurers are lagging behind.

    sigma4_2016_fig1

    For example, smaller mutual insurers have not yet adopted full online functionality in their business practices, perhaps reflecting their greater attachment to traditional agent/broker distribution. The laggards run the risk of losing out to market participants better placed to harness the new technologies. This is especially true given the growing development of peer-to-peer (P2P) insurance platforms, which enable individuals to share risks among themselves in much the same way that affinity-based mutual insurers do.

    The post A Comeback For Mutual Insurance? Swiss Re Report Investigates Six Sigma and Digital Technology appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.

    Fintech Schweiz Digital Finance News – FintechNewsCH

     
  • user 8:55 am on October 22, 2016 Permalink | Reply
    Tags: dentists, , , insurance, , , ,   

    Health Insurance InsurTech innovation may start with dentists and a P2P network of providers 

    Image source Aforacare does not present like a tech startup. There is no Crunchbase profile with lists of rounds by VCs. Nor do we read about any of the hot technologies that are like catnip for investors. Yet, if you look at Aforacare with fresh eyes, you may see theRead More
    Bank Innovation

     
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