How Insurers Use Data, AI, and Cloud Applications to Improve Customer Experiences

Insurance customers want simple digital experiences and quick solutions, such as instant policy quotes, efficient claims processing, 24/7 customer support, and seamless communication. This expectation has driven many insurance companies to leverage data and technology extensively to create digital services that offer more personalized and streamlined interactions. But consistently providing these rich experiences means first having actionable insights across the company, bolstered by data analysis—often powered by artificial intelligence (AI)—and facilitated by modern, cloud-enabled insurance applications.

Data Analysis, Personalization, and Applications

High-quality, curated data is key to providing a consistently high level of service to customers. In fact, insurance industry applications and services are being revolutionized by the insights gained into customer behavior, preferences, and risks via data analytics. Algorithms can actively harness data from a myriad of sources, including social media, Internet of Things (IoT) devices, and other communication channels such as mobile, to craft personalized products and services that can easily move between online and offline interactions.

For example, usage-based insurance (UBI) applications leverage telematics data analysis often collected through mobile devices to gain insights into individual driving behaviors, enabling insurers to tailor auto insurance policies with usage-based pricing models. This personalized approach is made possible by the UBI application on the customer’s smartphone that processes vast amounts of telematics data, including vehicle speed, acceleration, braking patterns, and location information, to assess risk levels accurately.

Additionally, contact center forecasting applications use sophisticated algorithms to predict service request volume per hour, which is crucial for optimizing staffing and resource allocation. However, these forecasting efforts are not without challenges. Disruptions such as latency, which causes delays in data transmission, and jitter, which leads to inconsistent data delivery, can significantly impact the accuracy of these predictions.

Without access to high-quality, easily understandable data, insurers are constantly at risk of creating “black boxes” from which insights are impossible to extract.

A Quick Tour of AI in the Insurance Industry

According to a McKinsey study, AI is projected to revolutionize every aspect of the insurance industry by 2030. It might seem as if AI only recently entered insurers’ application stacks. But in fact, it has a rich history in the insurance industry.

Geico’s virtual assistant, Kate: In 2017, Geico introduced an AI-powered virtual assistant named Kate. Kate assists customers with filing claims and answering policy-related questions, significantly improving customer satisfaction and reducing processing times.

State Farm’s image-assessment AI: State Farm has used AI algorithms to assess vehicle damage from images submitted by customers through a mobile app. This automated process speeds up claim processing and improves accuracy, ensuring fair and prompt settlements.

Lemonade’s instant underwriting: Lemonade employs AI to underwrite renters’ and homeowners’ insurance policies. Its algorithms analyze customer data and provide instant policy quotes, simplifying the purchasing process and offering customers immediate, personalized options.

Ping An Insurance’s risk-assessment models: Ping An Insurance in China uses AI-powered risk-assessment models for health and life insurance underwriting. These models analyze medical records and other data sources to assess risk factors and determine appropriate coverage, offering more tailored and efficient insurance solutions.

AXA’s AI-powered chatbots: AXA is an insurer that has implemented AI-powered chatbots to enhance customer support and streamline policy inquiries. These chatbots can handle a wide range of customer queries, improving response times and reducing the workload on human agents.

By integrating these and other AI-based applications, insurers can automate repetitive tasks and offer faster, more efficient services, such as claims processing and policy management. This technology minimizes manual errors and can enhance customer experience, track that experience via automated learning processes, and improve customer loyalty.

Application Modernization, Cloud Migration, and Visibility

Modernizing legacy applications and preparing them for cloud environments are crucial steps for long-established insurance companies looking to enhance customer experience. Cloud environments offer scalability and flexibility, allowing insurers to adjust their applications and protocols based on demand. This capability is especially important for custom and legacy applications to make sure they can handle peak loads without performance issues derailing customer experience during high-traffic periods.

Rearchitecting applications to leverage microservices architecture, for example, can improve customer experience by making applications more modular, scalable, and resilient. The hope is that this redesign will maintain performance and improve how the app works. This approach also enables insurers to take advantage of cloud-native services, such as serverless computing and containerization, which can further enhance application performance and reliability.

However, even with robust strategies and advanced technology, insurers can still face challenges with application performance and service disruptions. Knowing how your applications are available, how they are performing, and how your IT organization can troubleshoot them quickly is the most important part of improving customer experience.

NETSCOUT provides real-time visibility and deep insights built from packet-level data to improve network performance and digital services. Our approach transforms how insurance companies can plan, deliver, integrate, test, and deploy services and applications to effectively protect customer experience. After all, protecting service performance and availability is ultimately how insurance companies can improve customer experience.

Read this case study to see how NETSCOUT helped an industry-veteran insurance company protect millions in revenue while modernizing and migrating a critical application to the cloud.