Finance in Focus: Rethinking insurance with cognitive approaches

Finance in Focus: Rethinking insurance with cognitive approaches


Finance in Focus: Rethinking insurance with cognitive approachesThe recently published IBM Institute for Business Value (IBV) report, Rethinking insurance: How cognitive computing enhances engagement and efficiency resulted from engaging with more than 1,500 insurance executives worldwide. From them we learn the state of the insurance industry today and how cognitive technologies can improve the way insurers do business.

According to the report, with premium growth stagnant, declining income and disruption from outside players, insurers are looking for better ways to increase efficiency and get closer to customers. In the cognitive era, insurers that are outperforming the competition are rethinking insurance. They are applying cognitive technologies that understand, reason, learn and interact to help improve the way they do business.

Sixty-nine percent of those surveyed in 2016 describe their organizations as prepared to adopt cognitive computing. At the core, data—internal and external, structured and unstructured, real time and historical—powers and differentiates cognitive systems. These systems support insurance companies in providing insurance expertise at scale, enhance the client experience and free time to better engage with clients. As insurance is a highly skilled and knowledge-based endeavor, cognitive technologies can be used across the industry value chain, from advanced risk-based pricing models in marketing and product development all the way to sophisticated means of reducing and managing fraud in claims.

Previous studies have shown that trust is low in the insurance industry. Insurers need to do more to engage with their customers. They don’t have the luxury of high-volume transactions that a bank has or a high level of online activity that a retailer may have. Therefore, insurers have minimal opportunities to connect and engage with their customers. As a result, cognitive computing offers such a good opportunity for them to engage with their customers in new, cost-effective ways. Two examples demonstrate how insurers are already integrating cognitive capabilities into the customer experience: 

  • Cognitive chatbot: Take calls away from the call center by improving engagement through the website, aiding the quote process, allowing for simple policy changes and so on.
  • Agent assist: Level the playing field with all call center agents. Take your best-performing agent and train IBM Watson on how that agent handles and responds to calls. Then provide this training as a virtual assistant to everyone in the call center. This approach should then enable a consistent level of service across all agents and help reduce the level of training those agents need on products and customer queries. 

IBM has developed a set of 28 application programming interfaces (APIs) that make it easier for developers to create apps that include cognitive functionality. Significantly more APIs are expected to be added in Q1 2017. These APIs are available through the cloud—specifically the IBM Bluemix platform. Anyone can sign up for a Bluemix account and try out the APIs. The Watson Conversation API, for example, can be used for chatbots and agent assist, in particular.


Christian Bieck is the global insurance leader for the IBM Institute for Business Value. Bieck is an economist by training, and he worked in various roles in the insurance industry in Europe before joining IBM as a process consultant and researcher. He is a frequent speaker on thought leadership and innovation at insurance events and workshops and has authored various papers on insurance trends and implications, both for the IBM Institute for Business Value and international insurance industry publications. Reach Christian at christian.bieck@de.ibm.com 

Stephen Mills leads the Insurance Data and Data Strategy consulting team within IBM Global Business Services. Mills has worked for 20 years in the business intelligence and analytics space across a variety of sectors. For the past eight years, he has focused purely on the financial services sector, working on a variety of business-led solutions including information strategy, customer analytics, mobile strategy, telematics, the Solvency II directive, and pricing and rating. Follow Stephen on Twitter at @StephenMills1

Enhance engagement and efficiency with cognitive computing

Unlock the data within your organization by using IBM solutions built with analytics and cognitive technology for deeper customer insights, streamlined producer operations and to prevent insurance claims fraud. And Don’t miss other episodes in this podcast series.