Insurers are rethinking their strategies in the face of technology

More than 3,700 years ago, the kingdom of Babylon enacted the Code of Hammurabi. Engraved on a single, 4-ton slab of diorite that stands over 2 meters tall, the text laid down not only the law, but also the earliest-known written insurance policy. It declared that a debtor wouldn’t be required to pay back a loan if a catastrophe (i.e. personal disability, death, natural disaster, etc.) made it impossible.

The Code of Hammurabi / Photo credit: History.com

Over the centuries, the concept of insurance as a risk management tool has evolved to protect people from a wider range of losses. Today, you can obtain policies that insure almost everything, from your life and health to your next vacation.

According to Jeremy Jawish, co-founder and CEO of France-headquartered insurance tech startup Shift Technology, the increasing adoption of emerging technology is changing how insurers work.

He points out how well-known tech firms like Alibaba, Amazon, Grab, Lyft, and Uber are “redefining the way they interact with consumers,” noting that a similar change is happening across the insurance industry. “There’s a race to provide the best experience to consumers,” he says.

How is technology shaking up the insurance scene? Here are some of the ways that shifting mindsets are affecting the industry.

1. Insurance-as-a-service

Traditionally, obtaining insurance means having to deal directly with insurance carriers. Take, for instance, insuring a home purchase. You’d need to go through a few different channels on top of the buying process if you want your new home to be covered in the event of a catastrophe.

However, insurance-as-a-service is making this tedious process a thing of the past with end-to-end insurance transactional application programming interfaces. This allows businesses to integrate insurance offerings from verified carriers into their apps or websites, reaching customers at the exact point that they would need to buy insurance.

Insurance carrier Axa Singapore – the first to bring insurance-as-a-service to Asia – has started forming partnerships with businesses that offer products or services that would typically require an insurance policy purchase. This way, consumers can get covered with just a few simple clicks.

2. AI-driven fraud detection

Detecting insurance fraud is no simple task. Analysts have to compare stacks of claims against huge backlogs of historic data to determine whether or not to pay the sum, meaning people could wait weeks or even months before their claims are approved. But artificial intelligence is poised to change that.

Force, a Shift Technology solution that detects, alerts, and provides contextual guidance when determining a claim’s legitimacy, is an example of how AI can be applied to detect fraud.

“Insurers send their data to Force’s platform. Our algorithm looks at all the data and it detects suspicious claims,” explains Jawish. “Processes that usually take years or are impossible to do manually can easily be done using the same reasoning that experts would apply if they had access to all the data at once.”

Shift Technology co-founder and CEO Jeremy Jawish / Photo credit: Shift Technology

He adds that Shift Technology works with organizations across the world, such as the General Insurance Association of Singapore, to detect organized crime rings for auto and travel insurance fraud.

In 2017, the startup launched its first international office in Singapore, where it joined the Accreditation@SG Digital program by the Infocomm Media Development Authority of Singapore (IMDA).

“Being part of this program for us was quite natural because it gives us much more credibility in the market,” says Jawish. “Since we handle a lot of data, it was very important for us to have IMDA’s support.”

In the near future, Shift Technology will roll out more products designed to help insurers automate claims and further enhance customers’ insurance purchasing experience.

3. AR insurance tutorials

It may seem unlikely that the technology behind the hit mobile game Pokémon Go would be a catalyst for innovation in the insurance industry, but the widespread adoption of smart mobile devices has led to interesting applications.

The Group Retirement Savings (GRS) division of Canadian firm Desjardins Insurance has turned to augmented reality technology to give potential customers a better understanding of their coverage options. The move is aimed at helping people save smarter and plan toward retirement.

The cartoon avatar Penny explains complex concepts saving in a way that even a six-year-old could easily understand / Photo credit: Desjardin Insurance

The firm built an AR mobile app that lets users interact with a cartoon avatar named Penny by holding their device over a custom dollar bill. Penny explains complex concepts about saving money in a way that even a six-year-old could easily understand.

“We know that everyone learns differently, and that’s why we offer participants more choices for how they want to learn about the value of planning for retirement,” said Eric Filion, then vice president of development, marketing, and investment strategies for GRS, in a press release. “The more comfortable they are with accessing educational information that resonates with them, the more engaged they become.”

Shift Technology is one of the accredited companies under IMDA’s Accreditation@SG Digital program, which aims to accelerate the growth of innovative Singapore-based infocomm media companies by helping them establish credentials, build a track record, and scale globally.

To learn more about Force, visit Shift Technology’s website.