Nat Re Hosts 5th Life Annual Technical Forum On Digital Innovations In Insurance

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The National Reinsurance Corporation of the Philippines (Nat Re) held its 5th Annual Technical Forum (ATF) for the life industry at the New World Hotel in Makati City, Philippines. With the theme “Digital Innovations in Insurance”, the Forum convened industry experts to provide its attendees insights on new technological opportunities for life insurance in the Philippines. In attendance were CEOs, actuaries, underwriters, and marketing officers of Nat Re’s client companies, as well as representatives from the Insurance Commission.

Artificial Intelligence and Machine Learning in clinical reviews, contact center hubs, and underwriting

Mr. Shashank Verma, Head of Digital Transformation for Healthcare and Front Office Portfolios for EXL, and Mr. DG Srinivasan, Head of Capability Development for Healthcare Digital Transformation for EXL, delivered a presentation on the use of artificial intelligence (AI) and machine learning (ML) in the life insurance market.

Srinivasan (right), with his co-speaker Verma, on the journey of implementing AI and ML: “Bring in AI and ML slowly, make it learn, and… have it support the human”

The speakers described AI as the study of how to train applications and make appropriate decisions automatically, and ML as a subset of AI which learns from data gathered from various interactions and experience. “In a nutshell, ML learns while AI makes sure that [the application] intelligently performs the tasks which it is given,” said Srinivasan.

The speakers shared three examples of the relevance of such technologies in the Philippines and the insurance industry.

The first is their use in clinical reviews. Verma pointed out that nurses spend a significant amount of time doing administrative processes which can be lessened through various AI/ML engines. With the use of ML-based extraction technologies such as optical character reading (OCR), relevant information can be extracted from handwritten and other hard copy forms, a task usually done by nurses. The succeeding validations also typically done manually, such as verification of patient information and the coverage of their insurance, can also eventually be digitized and learned by ML.

“All the nurse will have to do then is to look at the different documentation such as doctor’s reports, use their clinical knowledge, and then make a decision,” Verma said.

The speakers’ second example is the use of these technologies in contact center hubs. Insurers can use ML to develop machine-based models which effectively deal with standard and repetitive queries, leaving only the most complex customer interactions to be dealt with by human agents. Verma also gave an example where ML can be used to predict the probability of receiving a follow-up call from a customer, based on the nature of their previous call(s), and give the agent recommended responses to lessen the customer’s need for additional follow-up calls.

The third example is the use of AI and ML in underwriting. The speakers showed examples of different AI and ML solutions, such as OCR, natural language processing, and robotic process automation, which can be applied to the whole spectrum of the underwriting process from reviewing the underwriting manual to giving a client a risk rating. “The goal of AI is never to remove the underwriter,” Srinivasan clarified, “but for the underwriter to make a correct decision.”

Artificial Intelligence and Machine Learning as a journey of learning for both humans and the engines

 When asked about how to deal with patient confidentiality issues when implementing AI solutions for clinical reviews, Verma said organizations must apply to the machines the same set of rules on data privacy they would apply when human beings process data. “Do not compromise those checks and balances [when you deploy the] machines,” Verma said. “Do not lower down the combined verification processes that you currently have.”

For organizations just starting to incorporate AI and ML, which the speakers described as a “journey”, Verma and Srinivasan suggested focusing on the low-risk but high-volume steps in their end-to-end value streams. They also warned that organizations should not make the mistake of disregarding AI/ML’s learning curve; the need for the human’s cross-verifications is especially important in the engine’s/model’s nascent stages of implementation. “Bring in AI and ML slowly, make it learn, and, in that gradual speed with which it is learning, you have it support the human,” Srinivasan said.

E-commerce growth by building capacity and momentum

The next speaker, Ms. Janette Toral, e-commerce advocate and digital influencer and leader, delivered a presentation on the state of e-commerce in the Philippines and ways on how insurers can improve their online strategies.

Toral started her session with sharing what worries most businesses, which is how to keep up and take advantage of market changes. These major market changes include direct and indirect competition, distractions affecting the firm’s workforce, commoditization of products, implementation of e-commerce, training a younger workforce, and putting out marketing content that stands out.

Toral on how businesses can grow their e-commerce sales: “Building momentum is important because if you rest… you start again”

She delved into the topic of e-commerce in the Philippines, which is on the rise with its contribution to the Philippine GDP at approximately 8.5%. She enumerated key variables that will determine the growth of the industry, which include smart phone costs, Internet connectivity, the percentage of middle-income households, costs of physical retail space, and the level of development of parcel/postal delivery systems.

The speaker made a reference to the Law of the Lid, one of author John C. Maxwell’s laws of becoming a good leader, which says that leadership ability determines a person’s level of effectiveness. An example of an application of this law can be found in the national government’s establishment of new “smart cities” in the countryside, which are meant to be new hotspots for business process outsourcing (BPO) centers.  One aspect of the program is technical training to increase the digital capabilities (or the so-called “lid”) of the community so they may effectively participate in future BPO ventures or establish their own e-commerce businesses. Toral also showed success stories of e-commerce start-ups whose businesses boomed after they raised the “lid” or the capabilities of their human capital.

Toral also referred to another one of Maxwell’s laws—the Law of the Big Mo—to stress the importance of finding growth momentum drivers for businesses’ e-commerce. “Building momentum is important because if you rest… you start again,” she said. She encouraged organizations to create Scrum sprints where each sprint builds momentum towards the next one. If insurers wish to target millennials, one momentum driver she suggested is having a user-friendly website or mobile application that makes it more convenient to do transactions online. “Whoever is savvy enough to accommodate millennials will win the game and catch their attention,” Toral said.

The heart of e-commerce is the customer

In order to improve saleability of insurance in the online marketplace, the speaker recommended insurers to market their firms as a start-up which would entail creating more awareness on the product, promoting heavily their value proposition to customers, and being more deliberate in connecting to their target markets. In terms of what to sell online, Toral suggested offering simple insurance products first before exploring more sophisticated ones.

However, the speaker urged insurers not only to create new online channels for sales and customer service but to focus as well on improving response times to queries sent through these channels. “As we build momentum towards e-commerce, let’s not forget the heart of it is the customer,” Toral said. “No matter how good you are with your online strategy, if your response time [to customers] is poor, you will not be preferred in the long run.”

Toral also pointed out that customers now choose value and quality of customer service over loyalty when choosing businesses to patronize. “It’s the firm who gives… the right attention [to the customer] at the right time who wins the game,” she added. “You have to take care of that customer or someone else will take that customer from you.”

Importance of collaboration within the industry, with government

All three speakers of Nat Re’s Life ATF highlighted the importance of collaboration within the industry and with the government.

Mr. Vic Tanjuakio, Nat Re’s Head of Life Reinsurance, asked Verma and Srinivasan how insurers can deploy their knowledge to banks so the latter may speed up the approvals of their customers’ loan applications, which are usually tied up with insurance requirements. Verma mentioned that data and information needed for banks to make a decision, such as credit and risk ratings, are actually already available; it is just a matter of using this data to build a model which can determine necessary decisions. “In certain countries, there is a common forum where insurers are even sharing some of these information to each other, [while] keeping personal information intact,” Verma said. “These meaningful insights which will help you make an underwriting decision benefit all insurers.”

The speakers take questions from the audience and from the moderator Mr. Vic Tanjuakio (left)

Asked about how the government should play a part in promoting the insurance industry’s use of e-commerce, Toral replied with: “It depends on how organized the industry is.” She said that if the private industry carries enough clout and has an established relationship with its regulators, it can conduct public-private consultations with its regulators and other relevant government bodies such as the National Privacy Commission. Insurers can then propose for the government to explore the idea of crafting an e-commerce roadmap for the insurance industry.