Have you envisaged including a Digital Assistant in your business strategy? Or maybe you’re looking to better understand how technology can be a force for transformation?
When it comes to business innovation like building out new products or releasing to new markets, Digital Assistants can be a more cost-efficient and safer alternative to options like call centres.
If you’re interested in:
- lowering operational costs to serve your existing and new customers;
- using advanced analytics and actionable data; or
- making better, more frequent and informed business decisions,
then read on my friend.
But first, what exactly is a Digital Assistant?
There are different types of Digital Assistants, with different skills and capabilities, but they all perform specific business actions based on the understanding of natural language and in context. These specific actions can be as simple as sending an email, recording a policy number in a database, retrieving information in a third-party application to assess risk, or answering a question about the policy wording.
The need to innovate now
The accelerating change in our society and economy, as well as the volume of misunderstood data surrounding us, call for a new form of ‘collaborative intelligence’ to join the workforce, a.k.a. ‘Digital Assistants’. Research* has found that early adopters of AI technologies, like Digital Assistants, are pulling ahead of their more circumspect counterparts.
The modernisation of customer engagement models, the creation of new products and new methods to assess risk are becoming a necessity - a direct consequence of the rising demand from consumers, businesses and the changing global economy.
Perhaps your company is wondering what a new risk profile assessment model might look like; or how dynamically pricing premiums can increase customer engagement and retention? The answers to complex questions like these cannot be found with a simple whiteboard session or waiting to see what the competition does.
One of the main roadblocks to innovation is a lack of knowledge which can be made up through digital experimentation. There are safer ways to test out technology - here are some examples:
1- Offering a new medium/channel to your legacy customers, such as a digital avatar, to renew their policy;
2- Creating a sub-brand to deal with a new customer segment;
3- Creating an internal Digital Assistant to assess your existing customer database and empower your teams to deliver more value.
Why Digital Assistants are ideal for experimentation
The main benefit of a Digital Assistant when it comes to testing a new innovation, is its ability to replicate a series of business rules and logic consistently, measuring and categorising how interactions impact the behaviour and engagement process.
Arguably, this approach may not seem perfect, yet the objective here remains experimental, including an outcome to quickly learn and iterate a strategic plan. It might be more challenging to master and iterate the same customer engagement model through a call centre, as each individual staff member is not consistent with the process and guidelines. Also, it seems evident that the cost of such an experiment will be much higher (it typically cost about $1 per minute for the average call centre to service a customer - therefore, 1,000 customer calls which last five minutes each would cost $5,000 - VHT).
Additionally, a Digital Assistant offers speed and flexibility during the learning process. The insurance industry is also highly regulated, and the consequence of being non-compliant is detrimental for the incumbents and the insurer. The digital adoption of an assistant is not only an opportunity to innovate, but you can also ensure easier and more consistent reporting.
Three potential uses for you to think about
1- Better understand consumer's behaviour and interest
You know consumer trends year to year, but things are changing more rapidly than ever, and your business must better understand consumer patterns and what matters to them. The insurance industry thrived for years by repeatedly using the same approach to assess risk and price premiums. The era of one product fitting all is coming to an end, and it is now time to implement the tools to listen and observe what your market demands and how they want to engage uniquely with your brand.
We all know that insurance jargon is not quite perceptible to the untrained ear, and there is a need to adapt the conversation to the audience, sometimes very diverse, that you are serving.
Not only will the Digital Assistant provide in depth analytics about your consumer, but they can adjust responses accordingly and in real-time based on vocabulary type, sentiments and context. Besides offering a more empathetic customer experience, you learn from your audience about their level of engagement with insurance products and your brand in particular.
Source: Forrester Research, ‘Take an iterative approach to digital insurance strategy’
2- Test a new product on an existing customer database or a new customer segment
By understanding what better-suited products you can create, you unveil an opportunity to discontinue some products, potentially adjust the wording to some policies, or creating a brand-new service unknown to you. By creating a new sales revenue stream, you also increase customer retention and maximise the opportunities offered by the market segment you are positioned in.
LexisNexis in their report ‘a time of change in small commercial insurance’ published in January 2019, stated that to stay ahead, carriers want to embrace market trends. Advanced and real-time analytics can give you the insight you need to better or create more suited products, and AI is seen globally an opportunity to achieve such learnings.
3- Launch on a new market/country
In the past six months, I’ve met many executives talking about growth market areas they couldn't reach because they lacked analytics and it was too expensive to build a team at such an early stage to trial an untouched territory.
Through experimentation, a Digital Assistant allows you to cost effectively access new knowledge that you might want to trial in a new country or understaffed business unit.
For example, SMEs and contractors are generally an underinsured or underserved segment as there is an overall lack of knowledge and understanding. For a small business, it is difficult to grasp if and for what they should be insured; and on the incumbent part, it is complex and tedious to accurately assess risk and price accordingly. AI-powered Digital Assistants are a cost effective way to engage and to serve this segment of the market.
The pressure to innovate is only increasing, particularly in industries like insurance. Whiteboard sessions are not enough, and experimenting with digital means, like a Digital Assistant, are a great way to test the waters, quickly gather analytics and learn, and of course iterate. Such channels are also arguably cheaper than other means of testing new innovation, like call centres.
The time is now, dip your toes in.
*MIT Sloan Management Review in 2018 surveyed more than 3,000 global executives on their adoption and application.