Welcome!

Artificial Intelligence Authors: Liz McMillan, Elizabeth White, Christoph Schell, Matt Brickey, Yeshim Deniz

Related Topics: @CloudExpo, Machine Learning , Artificial Intelligence, @ThingsExpo

@CloudExpo: Blog Feed Post

Insurance Industry's #DigitalTransformation | @CloudExpo @AppDynamics #ML

The web, mobility, and social media have introduced new sources of truth for the modern consumer

Digital Transformation in the Insurance Industry
By Omed Habib

The insurance industry is well aware that digital transformation is coming, even if some CIOs can’t really say what their individual companies will look like at the end of it all. In a survey of thousands of C-level execs around the world, insurance came in among the top five industries that are most likely to see “moderate to massive” digital disruption within the next 12 months. Only 20 percent of business leaders felt that they had the talent they needed to transform the enterprise, though. Here’s a closer look at what’s coming next in the exciting new era of software-defined insurance companies.

The Growth of the Insurance Model
The basic business model of the insurance industry hasn’t changed much since Edward Lloyd opened his coffee shop for seafaring folk in London in 1688. In the decades after Shakespeare passed away, Lloyd’s of London became a hotbed of intelligence on which ships had been seen where, how they fared on the open sea, and how likely they were to come into port with a healthy profit. The management at Lloyd’s created marine underwriting, insuring the riskiest of enterprises at the time.

In the three centuries or so that followed, insurance spread out to cover risk in many aspects of life, but the business model stayed constant. Actuarial experts with specialized knowledge on consumer and business risk assigned fees, and intermediaries made recommendations to customers. Now that era has come to a permanent close.

The web, mobility, and social media have introduced new sources of truth for the modern consumer. Comparison of side-by-side alternatives are instantaneous and comprehensive. Mobile device apps have ratcheted up expectations for insurance services that are autonomous, fast, and simple. In many cases, recommendations from networks of friends and family have replaced the insurance salesperson entirely. Just as web-enabled airline websites devastated the travel agency industry, software-defined insurance companies are sinking the ancient insurance business model.

How Online Insurance Simplified Complexity
One of the earliest software-defined insurance carriers, Esurance, opened its web-based car insurance services in 1999. It solved the problem of the time-consuming quote process that tended to end up with non-comparable policies.

The biggest innovation of Esurance was to break up the policy into components that could be added or removed by the consumer, moving the locus of information control out of the hands of the insurance agent. Many other companies followed, competing on capabilities of their websites. By the time Allstate bought the company in 2011, Esurance was valued at $1 billion.

The next generation of insurance tech transferred greater information control into the hands of the consumer. At the same time, it gave insurance carriers better information to use in assessing risk and establishing premiums. This took the form of:

  • Mobile apps that allowed simple account management tasks, tracked repair updates, and offered answers on insurance-related questions. These were always-on and available whenever the consumer had time, instead of during business hours.

  • Greater processing power and big data analysis allowed carriers to crunch more data in less time.

  • Web-based tracking provided customer data that was funneled to email for lead generation.

More and more, the essential core-value proposition of many insurance companies subtly changed from writing the most accurate policies to offering the most customer-centric brand. Geico became the nation’s number one insurance advertiser, betting $1.18 billion in ad spending on its brand. For Geico and Progressive, this kind of branding has paid off, but others in the same vertical have not seen the same kind of results. The larger carriers have consolidated their market dominance through better tech.

How Insurance Companies Are Becoming More Like Software Companies
In many ways, almost all companies are now considered software companies to some degree. Thanks to software, here are a few of the ways that innovative insurance companies are more agile than ever before:

  • Policy overview: Most companies have a secure sign-on area of the website or in the app to review policy details. Because of the fluid identity of online viewers, it can prove difficult for companies to definitely identify all the policies of a single individual or family.

  • Mid-term adjustments: Policies normally don’t change over the coverage period, but sometimes a change is big enough to affect the price. For example, the change of a ZIP Code, or even different streets in the same neighborhood, can change the price of coverage.

  • Loss notification: Many apps allow customers to begin a claim up to a certain point. This is one of the biggest areas for developers to focus on in terms of responsive AI that can ask the right questions.

  • Checking claim status: Most insurance companies have a place to check the status of a claim, but it is usually a field that must be updated manually, so it is not always current. Many times, the information isn’t sufficient, prompting a call for clarification. This area deserves more attention for automation and back end integration with other stakeholders in the claims process.

  • Directory assistance: Some insurance apps add value by providing information tangentially connected to insurance, such as a garage finder for car repairs.

Still, a survey of U.S. policy holders found that only 39 percent said that their insurance providers communicated with them along their preferred channels, such as SMS, email, or mobile apps.

The Next Wave of Insurance Tech
In many ways, mobile devices were merely the first step on the way to the rapid adoption of wearables. It’s no wonder that many insurance companies are already looking for original ways to provide value across the tiny screens of wearables.

According to 2014 survey data by Strategy Meets Action, nearly a quarter of U.S. insurance carriers (22 percent) reported they are already developing a strategy for wearables. Claims assessments, risk management, and data collection for telematics are three of the primary use cases for wearables and other emerging technologies like IoT.

Along those lines, an insurance company recently conducted a test of a Google Glass-type technology for claims adjusters. Video and images of the accident site were transferred directly from the field adjuster to the catastrophe division for faster claims processing. In the future, augmented reality can provide two-way data streams for adjusters in the field and their co-workers at the back end for more accurate decision-making in real time.

New Languages for Insurance
Many people still think of programming for insurance in terms of mainframes, COBOL, and Pascal. While there are legacy IT pieces still out there, insurance today is about enterprise development, mobile apps, and the cloud. In fact, many mainframes are making the complex transition into de facto cloud data centers running the latest Java deployments.

The impact of the modern stack is clear in the fact that Java, Python, and C++ still reign as the top choices for enterprise development in just about every industry. Java has many enemies in the coding world, but it still leads for large-scale deployments. Surprisingly, .NET is another leader, identified as the number one preferred enterprise development platform in a survey by Forrester.

The expanding volume and velocity of data is also creating a need for insurance developers proficient in R, Julia, Hadoop, and Scala.

The Problem with Millennials
At the same time insurance companies are planning ways to make the best use of emerging tech, they are also trying to adapt to the life preferences of the largest purchasing block in the population today.

On the plus side, millennials are more than two times as likely to buy insurance online, according to the latest Gallup polls. Twenty-seven percent of millennials are comfortable with online purchasing, compared to 11 percent for all other generations. Overall, 74 percent of the total population purchased a policy after talking to an agent. Because of the growth of AI chatbots and the availability of streaming video, millennials are likely to possibly do more without agent interaction in the years ahead.

On the negative side, millennials represent the largest number of customers who are actively disengaged (27 percent) or indifferent to (42 percent) their insurance carriers. That’s a recipe for greater churn and engagement wars among insurance carriers. The primary way that carriers are looking to improve that engagement is through better customer experiences.

Gallup suggested that messages related to performance and security appeal to the millennial’s concern for protecting private information. Simplified flow for completing coverage changes was another way that millennials gauge performance.

How Insurance Companies Can Improve The Customer Experience
As more insurance companies adapt to the latest hardware and software, they are discovering a corresponding need for optimization and performance monitoring to deliver on the promise of the technology. Customers have come to expect peak performance, reliable stability, and uptime. This can be especially difficult because many insurance carriers still operate using a mix of legacy and custom development applications.

AppDynamics’ application performance management for the insurance industry is tackling challenges like these head-on, before they put a drag on the customer experience. These systems can’t be productive without careful attention to performance, usability, and availability. To end users, the digital experience of their insurance provider has an effect on their perception of the overall brand.

Learn More
Find out more about our product or start your free trial today.

The post Digital Transformation in the Insurance Industry appeared first on Application Performance Monitoring Blog | AppDynamics.

More Stories By Jyoti Bansal

In high-production environments where release cycles are measured in hours or minutes — not days or weeks — there's little room for mistakes and no room for confusion. Everyone has to understand what's happening, in real time, and have the means to do whatever is necessary to keep applications up and running optimally.

DevOps is a high-stakes world, but done well, it delivers the agility and performance to significantly impact business competitiveness.

@ThingsExpo Stories
"We provide IoT solutions. We provide the most compatible solutions for many applications. Our solutions are industry agnostic and also protocol agnostic," explained Richard Han, Head of Sales and Marketing and Engineering at Systena America, in this SYS-CON.tv interview at @ThingsExpo, held June 6-8, 2017, at the Javits Center in New York City, NY.
SYS-CON Events announced today that Calligo, an innovative cloud service provider offering mid-sized companies the highest levels of data privacy and security, has been named "Bronze Sponsor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Calligo offers unparalleled application performance guarantees, commercial flexibility and a personalised support service from its globally located cloud plat...
Internet of @ThingsExpo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devic...
"The Striim platform is a full end-to-end streaming integration and analytics platform that is middleware that covers a lot of different use cases," explained Steve Wilkes, Founder and CTO at Striim, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We are focused on SAP running in the clouds, to make this super easy because we believe in the tremendous value of those powerful worlds - SAP and the cloud," explained Frank Stienhans, CTO of Ocean9, Inc., in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
DX World EXPO, LLC., a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
SYS-CON Events announced today that DXWorldExpo has been named “Global Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Digital Transformation is the key issue driving the global enterprise IT business. Digital Transformation is most prominent among Global 2000 enterprises and government institutions.
SYS-CON Events announced today that Datera, that offers a radically new data management architecture, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datera is transforming the traditional datacenter model through modern cloud simplicity. The technology industry is at another major inflection point. The rise of mobile, the Internet of Things, data storage and Big...
"MobiDev is a Ukraine-based software development company. We do mobile development, and we're specialists in that. But we do full stack software development for entrepreneurs, for emerging companies, and for enterprise ventures," explained Alan Winters, U.S. Head of Business Development at MobiDev, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We've been engaging with a lot of customers including Panasonic, we've been involved with Cisco and now we're working with the U.S. government - the Department of Homeland Security," explained Peter Jung, Chief Product Officer at Pulzze Systems, in this SYS-CON.tv interview at @ThingsExpo, held June 6-8, 2017, at the Javits Center in New York City, NY.
While the focus and objectives of IoT initiatives are many and diverse, they all share a few common attributes, and one of those is the network. Commonly, that network includes the Internet, over which there isn't any real control for performance and availability. Or is there? The current state of the art for Big Data analytics, as applied to network telemetry, offers new opportunities for improving and assuring operational integrity. In his session at @ThingsExpo, Jim Frey, Vice President of S...
SYS-CON Events announced today that DXWorldExpo has been named “Global Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Digital Transformation is the key issue driving the global enterprise IT business. Digital Transformation is most prominent among Global 2000 enterprises and government institutions.
In his opening keynote at 20th Cloud Expo, Michael Maximilien, Research Scientist, Architect, and Engineer at IBM, discussed the full potential of the cloud and social data requires artificial intelligence. By mixing Cloud Foundry and the rich set of Watson services, IBM's Bluemix is the best cloud operating system for enterprises today, providing rapid development and deployment of applications that can take advantage of the rich catalog of Watson services to help drive insights from the vast t...
SYS-CON Events announced today that EnterpriseTech has been named “Media Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. EnterpriseTech is a professional resource for news and intelligence covering the migration of high-end technologies into the enterprise and business-IT industry, with a special focus on high-tech solutions in new product development, workload management, increased effic...
SYS-CON Events announced today that Massive Networks, that helps your business operate seamlessly with fast, reliable, and secure internet and network solutions, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. As a premier telecommunications provider, Massive Networks is headquartered out of Louisville, Colorado. With years of experience under their belt, their team of...
SYS-CON Events announced today that Cloud Academy named "Bronze Sponsor" of 21st International Cloud Expo which will take place October 31 - November 2, 2017 at the Santa Clara Convention Center in Santa Clara, CA. Cloud Academy is the industry’s most innovative, vendor-neutral cloud technology training platform. Cloud Academy provides continuous learning solutions for individuals and enterprise teams for Amazon Web Services, Microsoft Azure, Google Cloud Platform, and the most popular cloud com...
SYS-CON Events announced today that Cloudistics, an on-premises cloud computing company, has been named “Bronze Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Cloudistics delivers a complete public cloud experience with composable on-premises infrastructures to medium and large enterprises. Its software-defined technology natively converges network, storage, compute, virtualization, and ...
SYS-CON Events announced today that CHEETAH Training & Innovation will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct. 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CHEETAH Training & Innovation is a cloud consulting and IT training firm specializing in improving clients cloud strategies and infrastructures for medium to large companies.
SYS-CON Events announced today that Datanami has been named “Media Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datanami is a communication channel dedicated to providing insight, analysis and up-to-the-minute information about emerging trends and solutions in Big Data. The publication sheds light on all cutting-edge technologies including networking, storage and applications, and thei...
The current age of digital transformation means that IT organizations must adapt their toolset to cover all digital experiences, beyond just the end users’. Today’s businesses can no longer focus solely on the digital interactions they manage with employees or customers; they must now contend with non-traditional factors. Whether it's the power of brand to make or break a company, the need to monitor across all locations 24/7, or the ability to proactively resolve issues, companies must adapt to...