Artificial Intelligence (AI) is currently a much discussed topic and is therefore also finding its way into the insurance industry. However, the use of AI is not fundamentally new in this context; in the backend, the AI transformation has been going on for some time. The claims processing of many insurers is already completely automated. Thanks to intelligent algorithms, the generated data can be collected, analyzed, and processed efficiently. Further developments in the backend will contribute to insurers gaining an even clearer picture of their customers in the future.

One example of how AI can create tailor-made offers for customers for car insurance is the collection and analysis of driving data. However, the data collected via telematics devices is limited and mainly relates to the insured vehicle, regardless of its surroundings. Thanks to the increasing number of sensors in cars, insurers - if they gain access to them - will be able to dispense with the installation of telematics devices in the future. They will also gain a much more comprehensive picture of the insured person's driving behaviour and will be able to reward this directly and offer equally personalized offers.

The most significant change is currently happening at the frontend. The rapidly advancing field of generative AI is transforming the business daily. In the future, AI will take on many tasks and increasingly support daily operations. The feared takeover by AI will not happen - humans with their advisory skills and empathy will remain at the center of all services. However, machines can assist in many consultation scenarios and handle repetitive tasks, allowing employees to focus on more complex issues.

The use of AI in direct customer interactions, for instance, enables more flexible and reliable engagement. Thanks to technology, a voicebot can staff the service hotline around the clock, advising customers on arising questions and issues. Progress in voicebot development has reached a point where they are barely distinguishable from humans. This helps avoid problems such as hard-to-reach hotlines or overloaded service representatives. Thus, AI fundamentally alters customer interaction.

The core business of the insurance industry has always revolved around data. To assess risks effectively, insurers must have a precise understanding of their customers. Typically, this is achieved through Customer Relationship Management (CRM), where customer data such as names, addresses, and other demographic details are collected and often stored in product-specific silos. However, this process may not necessarily contribute to a strong bond between the insurer and the customer, as it does not provide the insurer with a holistic view of the customer, preventing them from offering the best possible solutions.

The implementation of Customer Data Platforms (CDPs) plays a crucial role in gaining a better understanding of the customer. CDPs not only integrate customer data but also incorporate behavioral and transactional data, bringing them together on a unified platform. While many large insurers may already have a CDP in place, they often fail to fully leverage its potential. On the other hand, many small and medium-sized insurers have yet to make the transition to a CDP. The concept of "Customer 360" proves to be highly advantageous for both the insurer and the customer. Irrelevant offers and unnecessary communication can be off-putting to most customers. CDPs enable the creation of highly tailored offers and information that add genuine value. This, in turn, leads to a sustainable increase in customer satisfaction.

For a comprehensive understanding of their customer base, a well-thought-out data strategy is indispensable. However, collecting the necessary data is not without its challenges. Compliance is a crucial aspect to enable the collection of customer data in accordance with the GDPR. Particularly in the DACH region (Germany, Austria, Switzerland), there is a heightened sensitivity when it comes to sharing personal data.

Given the pivotal role of customer data, insurers have a keen interest in obtaining information that goes beyond login credentials. Therefore, implementing Consent Management Platforms is essential. These platforms aim to solicit marketing, tracking, or cookie consents in a straightforward, clear, and understandable manner. Key elements include transparency towards customers and education from insurers: Why, especially in the context of the post-cookie era, are specific data being collected? Where and for how long will they be stored, and how does the data collection benefit the customer?

Most customers interact with their insurance provider in precisely two scenarios: at the beginning, when securing their insurance, and in the event of a claim, when an issue arises and insurance benefits are sought. In this rather limited form of communication hides the risk that customers have little opportunity to establish a connection with the provider. If a claims interaction doesn't unfold as the customer expects, it often results in significant dissatisfaction and an immediate switch to a different provider.

To counteract this problem and positively and sustainably transform the customer's perception of their service provider, the role of the insurer must also undergo a transformation. Thanks to continuously gathered data from products related to health, financial security, and property protection, insurers gain high relevance and additional entry points to engage with their customers. By activating these entry points through value-added services, insurers can retain customers in the long term and increase their Customer Lifetime Value.

Many major insurers already offer value-added services, often independent of the insurance touchpoint: whether it's financial advice, nutrition tips, or informative content for car enthusiasts - what matters most is needs-oriented and personalized communication with the customer. This provides insurers with the opportunity to become an integral part of their customers' lives.

Two factors play a crucial role here: the ecosystem and technology. All these additional services can be integrated and conveniently offered through corresponding apps. This way, insurers maintain constant contact, stay in the customers' minds, and can become a genuine "Life Companion." Further advantage of this type of communication is that app content can also be individually tailored to the user using innovative technology.

 

Customer interaction should be the clear focus of the insurance industry now and in the future. The use of innovative technologies enables communication that is tailored to the customer, advises them in many situations and is not only helpful in the event of a claim. First movers will have a clear advantage here. Those who act hesitantly and watch the competition will be left behind. However, those who recognize the potential now will be ahead in the end.