The World Economic Forum recently launched its Global Platform for Geostrategic Collaboration to bring together leading policy research institutions (think tanks) to engage the global public on geostrategic challenges in a multipolar world.
The platform aims to fill the urgent need for leaders and experts to understand the world through the eyes of their counterparts in other regions and find better ways to strengthen cooperation.
Within this mission, the forum’s platform will bring together insurers, tech firms and governments together to find ways to tackle risks from new technology such as drones and driverless cars.
Mark Boulton, Insurance Sector Lead at Fujitsu UK & Ireland, had this to say:
“The impact that technology has on our life goes far beyond convenience and speed. With new capabilities come a whole new range of responsibilities, and it is time insurers rethink their approach towards new products, such as drones and driverless cars, and the risks they bring to the table. Assigning liability becomes more and more of a grey area as complex technologies emerge, blurring the lines between the decision-maker and the enabler.
“It is therefore paramount insurers understand these changes are transformational for the entire industry, and old rules cannot be applied to these emerging risks. The way we collect and share data, and the impact of IoT for instance has the potential to revolutionise the industry. It can also offer a great opportunity to scale up to those insurance providers who will seize the moment.
“This represents an important state of change. We will need to learn to co-exist with machines, and both the risk factor and future changes will have to accommodate this. Incorporating new technologies such as driverless cars will not happen overnight – a carefully thought out set of rules of integration needs to be in place. Of course, this will add risk and insurance complexity.
“Ultimately, new technologies represent a business change for the better; revolutionising not only the way in which an insurance organisation company works but the services they can provide to customers by embracing a future in a digital world.”
Michael Bender has worked in the insurance broking industry for over 30 years, specialising in the placement of International Binding Authority contracts for Coverholders in Liability and Property classes. As a Managing Director, he is responsible for the day-to-day running of B&W Brokers. Here he speaks to Finance Monthly about the company’s beginnings, his involvement in it, and the advantages and challenges of his role.
You helped set up B&W Brokers in 2015 – what was the process like? What were some of the challenges that you were faced with?
B&W Brokers was set up in 2015 by my business partner Neil Walton. I was sitting at home on gardening leave adhering to my restrictive covenants imposed by my previous employer whilst Neil forged ahead with our plan to set up a Lloyd’s Broker. The toughest part for me personally was that I was unable to meaningfully assist Neil until after 18 months from when I gave my leaving notice in.
The FCA Approval Application process was very time consuming and arduous and the information required was endless, but with the assistance of an outside third party was completed and agreed within 10 months. Once FCA Approval was granted, we sought Lloyd’s of London Broker Status Approval and this was completed and agreed within a further 4 months.
Shortly after B&W’s Lloyd’s Approval was confirmed, I managed to negotiate an agreeable arrangement with my previous employer which enabled me to start working at B&W and also allowed some of the colleagues who had previously worked with me to join us at B&W.
In real terms, in January 2016 B&W was finally up and running and the clients we had been previously dealing with, for the most part, decided to move to us.
What were the company’s priorities towards its clients from the very beginning? Have these changed, 2 years later?
Our priority was to make the change of broker process as easy as possible for those clients that chose to join us and to continue to be a professional, independent, honest and loyal broker to them.
The first priority I believe was achieved and the second part to this day remains the same to our existing clients and to any clients that may join us in the future.
What would you say are the benefits of being a specialist boutique broker?
The benefit of being a boutique broker is that we can provide clients with a personal service. We do not overstretch ourselves by trying to handle business we have no knowledge of. We avoid clashes of interest between our clients and this has resulted in us maintaining loyalty from our clients. Over 50% of our clients have been with us, as individuals, for over 20 years.
As with any new business, cash flow is a major consideration and with the help of Neil Walton’s other company Centor Insurance & Risk Management, which assisted us with some funding, after a relatively short period, we have managed to stand on our own two feet. The fact that the company has no debt and even managed to pay its shareholders a dividend in its first full year, is a testament to how well the business of the company has bedded in.
As a Managing Director, what are the main day-to-day challenges that you face?
The main challenge, apart from compliance, for me is to keep the clients happy. In an ever-changing market, where IT & Data capture is becoming increasingly more important, we need to keep up with our competitors or even move ahead if possible.
What is the most rewarding aspect of your role?
Being able for the most part to be in control of my own destiny for the first time in my career.
Also, it is rewarding to be able to make decisions with my senior colleagues that will determine how B&W Brokers will hopefully grow and evolve.
What is your overall mission for the company? How do you ensure this mission is upheld?
Our mission is to stick by our principles and encourage other like-minded individuals to join us to help grow the company. In a society that has increasing pressure to succeed we do not want to be sitting on our hands, but we do not want to grow by changing our ethos either.
What do you anticipate for the future of B&W Brokers?
I would anticipate that we have steady growth for 2017 in the main current territories that we trade in, namely Canada and Australia and then look to broaden our appetite for business in other classes of business and territories in 2018 onwards.
For our size, we are a profitable company and this will always be a focus of ours no matter what potential growth is achieved.
One of our strengths is that we have a “Hard Core” of Lloyd’s Underwriters who have supported us over the years and have remained with us through thick and thin. We want to continue this approach by achieving the same in other classes of business.
Our aim is always to see Underwriters and our Coverholders make a profit on the business they write. This has not always been easy when contracts become large in volume and underwriting focus is sometimes lost but we endeavour to give a balance of business to our markets so this may be achieved.
If you would like to find out more about B&W Brokers Limited please email info@bandw.london or visit www.BandW.London.
“In an industry that provides a product that a client is forced to buy for one reason or another we aim to make the process of buying insurance less painful for our insureds.”
Our September Expert Insight section benefits from an interview with Raymond Walker - Founder, Chairman and CEO of Caribbean Assurance Brokers Ltd. in Jamaica.
Over the last 34 years, Raymond has led a distinguished management, sales and marketing career. He was introduced to the industry as a Salesman at the then Life of Jamaica (LOJ) and quickly moved up the ranks to Vice President of Marketing. After a successful tenure at LOJ, Raymond then moved on to Blue Cross of Jamaica, where, as the Executive Vice President of Marketing & Services, he further realized that advocacy and the ultimate representation of any client would be best achieved via Insurance Broking and not so much within the confines of an insurance company. This idea truly resonated and reinforced Raymond’s desire to establish an Insurance Brokerage.
In 2005, he gathered a team of dedicated professionals, who shared his vision and together they formed Caribbean Assurance Brokers Ltd. (CAB), a multi-line insurance brokerage, offering the full spectrum of General, Employee Benefits, Individual Life, International Health, International Life, Travel and Credit Union Members insurance products and services to cover all possible needs while providing the best terms with greatest value for money.
As Chairman of CAB’s Marketing and Business Development Committee of the Board, Raymond frequently reviews strategies and initiatives designed to differentiate CAB from its competitors. Some of these initiatives have not only allowed CAB to create valuable market niches but have also expanded the company’s reach and scope well beyond the shores of Jamaica.
Please tell us a little about the typical insurance matters that Caribbean Assurance Brokers Limited deal with?
At Caribbean Assurance Brokers Limited, our role is to act on behalf of our clients by identifying and providing advice in their area of interest. We place a high value on our client’s needs, and so, as a multi-line insurance brokerage, we enroll in all areas, whether it be Employee Benefits, General Insurance, Individual Insurance or International Insurance.
How do you manage the diversity of your services so that there is synergy between each offering?
We place a high value on a strong team approach, which ensures that our clients benefit from the collective expertise of our diverse specialists. In addition to several types of meetings, there exists a range of cross-selling opportunities throughout the company. There are weekly internal CAB-inet meetings that we use to discuss the week’s plans from each area, Management meetings at the beginning of each month, used to discuss the performances of the previous month and our monthly Staff meetings, where we use the opportunity to keep all staff members informed and involved in all product lines. These meetings were designed to ensure that everyone is aware at all times, and along with our cross-selling advantages, they assist in keeping the synergy between each offering within the company.
What would you say are the specific challenges of assisting clients with insurance?
In the insurance industry, one of the greatest challenges recognized is that not many clients understand the intricacies of risk. The average person may only consider the cost, not realizing that the cheaper option may not necessarily be within their best interest. At Caribbean Assurance Brokers, we take the time out to educate our clients, which is key, because we are aware that some persons do not even recognize the importance of insurance, which at times, makes it difficult for us to get clients to allocate sufficient time for a wholesome discussion on their risk profile. Moreover, it is perceived that even with sophisticated clients, there is still a fundamental mistrust of insurance. People tend to want to see the ‘fine print’.
What strategies do you implement to minimize financial burdens in regards to insurance packages?
At CAB, we operate within a much lower cost regimen than our competitors because we generate at least 65% of our own energy needs via Solar Panels. With electricity being a major cost driver in Jamaica, we are able to operate at lower margins I.e. lower commission rates. This is critical, as margins in terms of commission rates impact the premium, so we can offer competitive products at lower rates.
What are the particular challenges that insurers in the Caribbean have been facing over the past year in relation to changes in what customers expect in terms of products and services?
The brokerage arena is characterized by fierce competition, and once there is a competitive arena, people will shop around. Clients expect to receive the greatest value for the smallest outlay. Fierce competition leads companies to lower their rates to maintain their clients, while other companies lower theirs to pull clients. Also, extremely fierce competition is likely to come from some of the very same insurance companies for which we solicit business.
It is also observed that the increase level of awareness of a more sophisticated market in the Caribbean is driving expectations of our clients to the extent that they are demanding first-world products and services at third-world premiums.
Can you tell Finance Monthly about your involvement in the community and its impact?
In June 2006, our Social Club Outreach Committee decided that part of its mandate would be to give back to the community in a very real way because we felt that as a new company, we needed to not only do well but also to do good. Therefore, any contribution that we made towards national development would not only give great personal satisfaction to the staff, but also generate a very positive response in the community in which we operate. We make most of our contributions to the development of young minds at the Reddie’s Place of Safety, which has been a haven to orphans, as well as abandoned and abused youngsters. This program continues to date, which involves the provision of groceries to the Home each month along with several interactions with the children during the holiday periods. The children have now become an integral part of the lives of our Team and are involved in all of CAB’s social activities.
In addition to the Reddies Place of Safety, we have awarded scholarships to two members of the community. One has graduated from high school, now attending University and the other has graduated from high school and is now an honour student. Caribbean Assurance Brokers remains committed to these children, as we believe the future success of Jamaica lies with the development of the hearts and minds of the nation’s youth.
What makes your company unique?
Caribbean Assurance Brokers Ltd has exclusive rights to certain products, namely our International Comprehensive Health Insurance Programme (ICHIP) and our short-term Medical Travel Insurance Product, Assured Travel. Our ICHIP Programme allows clients to access first-world medical health services. The plan carries a zero deductible option locally and globally, except for the USA. It provides up to $2 million worth of coverage each year and requires no medical examinations and no age limit amongst other premium benefits.
Our Assured Travel Product provides Travel Insurance to clients with the convenience of direct payment online, and access to an extensive International Provider Network of Medical services with 24-hour emergency access anywhere in the world.
Another value proposition that CAB has introduced to its clients is our loyalty program, which will assist in our customer retention, expansion and acquisition.
In recognition of our amazing and loyal clients, we have recently launched our Caribbean Assurance Brokers Loyalty Programme (CABLP), where our customers are given their personal loyalty card which provides them access to receive discounts, savings and cashback at over 200 merchants and providers locations island wide; which includes leading supermarkets, wellness centers, retail stores, hotels, pharmacies, hospital, restaurants, gym and much more. This is our way of giving back to our valued customers and another winning competitive edge.
Howard Ebo is the Managing Partner of Commonwealth of Atlanta – a company that was formed to address the needs of individuals, executives and small to midsize companies (with revenues between 300K and 15M) that were underserved by larger financial institutions. Here Howard tells us more about the company, the services that it offers and the most common challenges that it is faced with.
Please tell me a little about the typical insurance matters Commonwealth of Atlanta deals with?
At Commonwealth of Atlanta we specialize in all types of risk management through insurance. Dependant on a client’s needs, we may recommend term life, universal life, variable universal life, whole life and/or disability income insurances for protection. We take a 21st century approach to addressing client and business needs by examining their entire financial picture and then helping them towards their unique goals. We provide solutions utilizing our strategic partners in advance planning, insurance concepts, and product partners to help solve for client’s concerns resulting in peace of mind. We specialize in four core areas:
In fact, we were recently featured in the Wall Street Journal, Atlanta Wealth Guide, which highlighted our 21st Century service oriented approach to servicing clients.
What would you say are the specific challenges of assisting clients with insurance?
Our 21st century approach to address business owner’s needs is remarkable. We strategize with our internal experts to provide advance planning concepts which helps our clients view insurance as protection as well as an asset to their long term plans.
What strategies do you implement to minimize financial burdens in regards to insurance packages?
Our 21st century approach allows for flexibility and creativity when coming up with recommendations for clients. Our access to premiere advance planning experts allows us to bring our best collective thoughts and strategies to consider.
What are the particular challenges that insurers in the US have been facing over the past year in relation to changes in what customers expect in terms of products and services?
Consumers have been faced with a need to know more as they take on more financial responsibilities; some of which may have been covered or shared with an employer in the past. At Commonwealth of Atlanta we believe in educating our clients to help them make informed decisions for their families and businesses. Whatever the situation is, we help educate and close gaps by providing personalized service.
How are you currently lobbying or working towards the development of new insurance regulations or permissible strategies in the state of Atlanta, or nationally?
Many of our agents at Commonwealth of Atlanta are active members in national financial associations to stay abreast and adapt to changes in regulations. All of our agents complete continuing education in the financial industry, which enables them to bring the most current thinking and best strategies to serve our clients.
Can you tell us about your involvement in the community and its impact?
At Commonwealth Atlanta we support and encourage individual and group activities in support of our community. Our agents work on passion projects such as Atlanta Community Food Bank, Open Hand and many more, volunteering their time and talents.
Contact details:
Address: 5909 Peachtree Dunwoody Road, Building D, Suite 990, Atlanta, GA 30328
Phone: (+1) 678-342-3100
Website: cwbfs.com
FirstPort Insurance Services is a respected and trusted insurance broker working in a niche market that specialises in insurance for blocks of apartments. It prides itself on its ethical ways of working and customer-centred ethos. Managing Director, Judi Runciman talks about her approach and that of her team, which ensures that the business stands out from the crowd.
I began my career in insurance 45 years ago as an underwriter and moved to broking when I was given the opportunity to run a small brokerage office. I have never looked back. Since then I have worked both at a local and national level and have seen a great deal that has inspired me for my leadership of FirstPort Insurance Services.
FirstPort as a business has a strapline ‘More Than Just Bricks and Mortar’, in our business this has never been more relevant.
We deal directly with Resident Management and Right to Manage Company Directors who are entering into contracts with us to arrange their buildings insurance. Some of these clients have taken on these roles without prior property management or insurance knowledge and we take the time to go the extra mile so that they fully understand what service we provide and the benefits – it’s about making their life easier. With block insurance, not only is it important that we get the right price, but also the right cover as not all products on the market are comparable.
As a contents insurance broker, with over 12,000 contents insurance customers, we are often dealing with vulnerable people when it comes to our retirement property customers who require a service that offers reassurance and confidence in our ability. Each customer has a named contact within our team so they can speak to the same person for all their dealings with us and can form a relationship with them. Customer feedback on our unique approach is very complimentary - we have many long term customers coming back to us year on year because they trust and value our service.
The environment we deal in can be extremely complex. For buildings insurance, we are often dealing with multi-block sites that require a tailored approach. We deal with crisis situations, such as large-scale water damage that can affect 100s of apartments and communal facilities. In these situations, we need to be on hand to provide not only a rapid response, but one that meets the needs of all customers concerned.
My team are wonderfully supportive and we are all on the same wave-length as I only employ people that can showcase they have strong ethics and morals. I know we will always put the customer at the heart of what we do, not only because that is what is expected of us by our regulators*, but also because everyone deserves to be dealt with in a respectful manner and given the best advice and service. We work very hard to be fair and transparent to our clients and to treat them with the respect we would wish to receive ourselves.
We operate in line with our own Code of Ethics that I have developed with my team. It sets out the standards we want to work to. For us, it’s about being accurate and straightforward with customers and ensuring advice is tailored and suitable for their individual needs. It’s also about remembering everyone is an individual and about putting ourselves in someone else’s shoes and seeing it from their perspective so the service truly reflects their situation and requirements. We know we don’t always get it right but we always learn from our experiences and have a will to continually improve.
It’s very exciting times for FirstPort Insurance Services. We are growing, with plenty of new business on the horizon. FirstPort recently announced a major acquisition of Pentland Estate Management. I am confident that this will give us an opportunity to WOW a whole new customer base, and I am confident our customer–centric approach will serve us well and see us taking our business forward in a way that I am extremely proud of.
*FirstPort Insurance Services is authorised and regulated by the Financial Conduct Authority.
Website: https://www.firstport.co.uk/
By Christopher Hillman, Principal Data Scientist at Think Big Analytics, a Teradata Company
Insurance fraud is a growing problem which many insurers have begun to dedicate new departments and whopping budgets to try and tackle. Huge amounts of time and effort is now spent detecting fraud before paying claims to avoid the complexity and expense of recovering a loss – insurance companies certainly don’t want to pay out claims only then to realise they are fake.
Previously, this process involved manually and laboriously going through masses of individual claims while looking out for suspicious activity, creating a large drain on time, revenue and resources. Now, much of that backend research is being completed faster utilising data and analytics, thereby improving the productivity and efficiency of processes while keeping costs down. Despite this, a significant amount of data that might be meaningful never gets analysed and often, advanced analysts still need to be brought in to uncover meaning from results.
Fraud Invaders: a business case
Imagine being able to cut directly to the chase, removing the human effort needed to tackle huge numbers of worksheets to view potentially fraudulent activity. With advanced analytics and visualisation techniques, this is now possible. To demonstrate, let’s look at a business case called Fraud Invaders.
This case aimed to solve an insurer’s crucial business challenge by discovering a new way to focus on a tighter subset of cases to drive fraud investigation efficiency. To begin, claims documents that had been filled out and submitted by the insurer’s customers were collected, some of which were known to be fraudulent. These known cases of fraud were flagged and put through text mining to extract anything that was a clear identifier such as a bank account, email address or phone number. Following this process, analytics were used to uncover correlations between claims.
With this output, a data visualisation (or network graph) was put together. The resulting image, like the one included below, was made up of dots which represent individual claims, with lines which draw data connections between two or more claim documents. An example of a fraud indicator can be monthly insurance payments from the same bank account: chances are the separate claims belong to the same person or are three different people working together to commit fraud.
Not just a pretty picture: how it works
There’s more to see than initially (and appealingly) meets the eye. The dot clusters visible in the image show us who the “fraud invaders” are. The larger and more apparently connected the cluster, the greater the likelihood of fraudulent activity: this ability to gauge the potential for fraud based on the size of dots and amount of connections can be carried out with the need for little more than a quick look.
Using graphs like these as a foundation, claims teams can identify likely suspects and focus their investigations on these groups. Although not all suspects pulled out will turn out to be fraudsters, far less time, revenue and resources will have been required for this process in comparison to traditional, manual methods. In addition, incidents that may have previously slipped through the net may now be uncovered.
Uncapped opportunity: lessons from Fraud Invaders
In addition to helping insurers to identify fraudulent activity, advanced analytics and visualisation can also reveal networks of people and strong influencers who can assist businesses in attracting new customers, or cause them to lose them. This branch of data science, known as “Social Network Analysis” (not to be confused with Social Media) is a powerful technique that requires true multi-genre analytics. A variety of individual techniques are required to produce a model of a customers’ social network including text mining, fuzzy matching, time series processing and graph analytics. By traversing a persons’ network graph, claim teams can see who they are connected with and who they are influenced by when making decisions such as a purchase or switching services.
Overall, regardless of the desired outcome, Fraud Invaders offers a good lesson to businesses in how to achieve what they want: begin with a solution – rather than just a problem – in mind.
Website: http://www.teradata.com/
Only 12% of homeowners in the US had flood insurance in 2016. For every one inch of flood, it could cost a homeowner $20,000 in damages. Here’s how flood insurance works, the average cost and if it’s too late to get covered.
A recent report form PwC concludes that UK investment in InsurTech in the second quarter of 2017 surpassed that of the previous three quarters, increasing to $290 million (£218m) in the first half of 2017, compared to $9.7 million (£7.3m) the year before.
Global investment in InsurTech by global insurance firms, reinsurance firms and venture capital companies surged 247% to $985 million.
Mark Boulton, Insurance Sector Lead at Fujitsu UK & Ireland has this to say to Finance Monthly:
“This year has been phenomenal for the insurtech industry in the UK, and these latest figures reflect it. Increasingly, we see the market gaining momentum, and the amalgam of data made available is reshaping the industry in an unparalleled fashion. Investors are coming to much better understand the values that lie within a connected world, from more dynamic customer relationships to personalisation and need for tailor-made solutions.
“Fujitsu’s recent research looking into the UK’s digital landscape showed that nearly 40% of people want the UK to make faster digital progress. As such, insurers need to keep up with the rapidly changing dynamics and unlock the power of technologies.
“Although many insurance companies have digital on their radar, it is important for this industry to take advantage of digital innovation by not only creating savvy online apps and improving the digital elements on the consumer-facing side, but by also implementing digital throughout the business. This will help insurers not only save more, but also become more integrated and process efficient. The amount of deals and investment in the past year are a vote of confidence and now is time UK claims its role as a global insurtech hub.”
While many younger drivers have been using so-called black box car insurance, telematics has yet to become mainstream. The FT's Oliver Ralph test drives a telematics system to see how it affects his driving, and whether it could be the future of car insurance.
Customer satisfaction isn’t something that resonates when we think about insurance companies, so what are they getting wrong? Karen Wheeler, Country Manager and Vice-President of Affinion UK, here presents for Finance Monthly 4 ways insurers can improve customer fulfilment.
The insurance industry didn’t have much cause for celebration when the Institute of Customer Satisfaction released its latest Customer Satisfaction Index. In a survey of over 10,000 UK customers, the sector faced the unenviable accolade of being the only sector not to improve its satisfaction index score compared to the previous six months. In contrast, banks, leisure and telcos were some of the sectors to show improved levels of customer satisfaction. This bad news was echoed by research by The Actuary, which revealed 27.9% find the insurance sector the worst when it comes to customer service.
So, for an industry which is notorious for low customer loyalty and bad service, what can providers do to build better relationships with their customers?
The challenge insurers’ face is that they operate in a highly commoditised environment, with customers faced with a sea of overwhelming choice. And the truth is that customers are often only basing their choice on price. According to research by Marks & Spencer, 95% of respondents stated that price was one of the most important factors to them when deciding which insurance provider to choose.
Insurers also know their customers will typically only make contact when they either need to make a claim, or renew a policy. And making a claim usually happens at a point of crisis, for example theft, damage or loss – when people are, understandably, feeling worried about their possessions, health or family.
These factors combined means insurers need to work hard to differentiate themselves from competitors by engaging with customers in a positive way, and finding new reasons to be a part of their lives. For example, thinking beyond the traditional, physical products insurance policies cover – homes, cars, phones – to solutions that can help customers keep their personal data safe online.
In a world where we live our lives through our devices – using apps to transfer money, ordering shopping to be delivered on the same day – it’s clear that insurers need to keep pace with the digital age. However, there are still improvements to be made, a recent survey by Eptica found the UK’s leading insurance companies fail to accurately answer more than two thirds (68%) of routine questions asked through the web, email, Twitter and Facebook.
Looking to the US for inspiration, digital insurer Lemonade is making waves for its digital-first, fuss-free approach to claims. At the start of 2017, its virtual assistant Jim set a world record as it reviewed, processed and paid a claim in 3 seconds – with no paperwork. If all insurers can aim to deliver this level of service, which brings cost and time-saving benefits to consumers, this could lead to increased engagement, loyalty and advocacy.
Many people take out insurance policies and never have to make a claim. The appeal of a policy is the peace of mind it offers; consumers feel better knowing that if the worst happens, they have the support in place to help them. Of course, it isn’t just physical possessions – houses, cars, phones – that people want to protect.
With cyber hacking scandals hitting the headlines every week, consumers are increasingly aware, and worried about, the threat of online fraud. According to research by Callcredit Information Group, 66% of consumers perceive the risk of identity theft and online fraud as one of their biggest concerns around sharing personal information online.
As the old saying goes, prevention is better than cure – and this is certainly the case when it comes to online fraud. If a hacker finds out the password a person uses across several sites, it can quickly snowball out of control. This is clearly a risk many take, with Callcredit also revealing less than half (49%) of consumers regularly change their passwords as a way to prevent fraud.
So what can insurers do to help their customers? When you consider the perception consumers’ have of their insurers as guardians of their belongings, there is a natural role they can play in helping customers to prevent and detect fraud incidents before they have even occurred – and help assist and resolve issues if they do arise. For example, providing cyber prevention and detection services that continually monitor their customers’ activity online and flags incidents when they’re at risk.
With insurance often seen as a necessary, but not particularly enjoyable part, of life, insurers need to think beyond their remit and consider how else they can add value and benefits to consumers’ lives. That way, they may well move up the table in the next Customer Satisfaction Index.
Two of the UK’s largest insurance companies, Axa and Aviva, recently disclosed increased profits and dividends at a time when drivers are paying out car insurance premiums at a record high average of £690 for comprehensive cover.
Aviva’s half year results for 2017 show that its overall operating profit rose by 11%, and that operating profit from UK motor insurance increased 9% (2017: £580m; 2016: £530m). The dividend paid out to shareholders went up by 13%.
Axa also reported strong half year performance: a 4% increase in underlying earnings, with 6% growth in revenue from UK motor insurance. Axa even concedes in their report to the stock market that the UK motor insurance market was a factor in their overall growth in the first half of the financial year.
“Axa and Aviva haven't missed a trick in blaming everything and everyone else for insurance premium rises – whiplash, fraud, insurance premium tax, the discount rate – but today we can see the real reason in black and white. Yet another boost in profits and yet more pay outs for their shareholders. They run a good line in shifting the blame but the facts speak for themselves - their whinging is to distract from what is really going on here, healthy profits and well feathered nests,” said Tom Jones, head of policy at campaign law firm Thompsons Solicitors.
In the last week, insurers have again come under fire as an investigation found motorists were being charged as much as 100% over the odds for repair costs. The Telegraph published evidence of Axa ‘instructing a repairer to charge "not at fault" customers a labour rate 54% higher than the rate paid by other customers’.
There are concerns that a potential government U-turn on the discount rate which affects the damages paid out by insurers to those with long term, serious and life changing injuries as well as the government's willingness to increase the small claims limit against inflationary logic will only see further increases in profits and remuneration for insurer CEOs.
“The insurers are constantly crying wolf and the government needs to stop pandering to them. They claim their backs are against the wall but in reality, as Aviva and Axa’s figures prove, it's all looking pretty sunny for them and their investors,” continued Mr. Jones.
“Motor insurance is compulsory in the UK yet those who provide it and are making good profit from it are unabashed in punishing the consumer by continually bumping up premiums at the same time as lobbying for changes that will restrict access to justice.”
(Source: Thompsons Solicitors)
By Rob Brown, Associate Vice President at Cognizant’s Centre for the Future of Work
Chatbots are gaining in popularity in a number of industries as an important customer service tool, with financial services and insurance particularly keen to roll them out: Crédit Agricole Assurance has Marc, and Bank of America recently announced it was introducing Erica. Barclays, Société Générale, USAA, BBVA, and Capital One have all also begun investigating the technology.
The rise of chatbots is being driven by several converging trends: the popularity of messaging apps, the explosion of the app ecosystem, advancements in artificial intelligence (AI) and cognitive technologies, conversational user interfaces and a wider reach of automation. Their adoption is accelerating so quickly that Oracle believes that 80% of brands will be using them by 2020. But will the current hype be sustainable over time without a stronger business rationale and better short-term results?
We live in an age of instant gratification, and this certainly applies to exchange of information – the core mission of financial services. So why are customers confronted with long wait-times on hold, being transferred department-to-department, or having to wait through a list of phone prompts? In the context of chatbots, it is actually not about “the robot” at all, it is all about how easy the end-user finds it to use, and simply whether it works or not. To get it right, businesses should start preparing for the coming bot age now if they have not begun to already. This means peeking into the future and designing bots to respond to today’s customer needs, such as personalisation, context, meaning, first contact resolution, management, as well as bot-human interaction and interface design.
Here are four areas chatbots will evolve.
Chatbots will be the vanguard of these efforts, and success will hinge upon their ability to become useful, maybe even indispensable, to human beings. Automation has its limits — and there are some things that robots just cannot do. That is where a blended model of automation augmenting people in their daily lives, conversations, and information requirements can provide extraordinary outcomes. By connecting conversations with meaning, context and intelligence, and providing people with relevant information in real-time and after absences, chatbots will provide as higher quality service and outcomes.
For companies in financial services, in addition to other industries, it requires striking a balance between speed, specialisation, and personalisation provided by chatbots and the ability to cater to human sensibilities and expectations. After all, the main goal is to support users and to make their lives easier.
