??Generative AI: The Next Frontier of InsurTech??
Welcome back, Tars Family!
It's the year 1666.?
In the early hours of a September morning, a?small fire starts at Thomas?Farriner's Bakery?in Pudding Lane, London.
In a city composed of mostly timber-framed buildings, soon?the fire?spreads —?quite literally like wildfire — eventually torching??all of London.
Over 13,000 buildings were destroyed in this?Great Fire.?Private property, worth an unbelievable?￡1.5 billion in today’s money, just goes?up in smoke.
As you can imagine - there’s nothing like a giant, city-destroying calamity to get industrious men?thinking about?how they'll?actually pay for repairs and rebuilds in the future.?
Nicholas Barbon was one such man.
Sensing an incredible business opportunity, in 1680, he started?the world's first property?insurance company, ‘The?Fire Office’.?Soon, others followed, and by 1690, one in ten houses in London was insured.
A whole new industry is born.?
But that's not where the story ends.
By 1700, insurance companies had realised that it would probably be cheaper to put out the fires than to pay for rebuilds.?
Thus were born the very?first fire brigades - a?technological intervention to protect the homes of policyholders - while also?improving the insurer's bottom line.?
If you think bout it, doesn't that make?fire brigades an early 'InsurTech' initiative? Because at its core, InsurTech is?essentially about crafting?win-win technological solutions to address pain points in the industry!
Given this?history of insurance businesses leveraging timely opportunities, is it then any wonder that they are now also embracing Generative AI?
From Co-pilots for Underwriting to Virtual?Assistants for Policy Queries, this week's newsletter will seek to untangle how exactly LLMs are revolutionizing InsurTech transformations.?
But before we dive further into the details, here's a quick update on?what Team Tars has been up to ????
??? What's ?? at Tars ?
?????New Tars Blogpost On Digital Transformation Through InsurTech ??We just?published a brand new blog post titled 'What is InsurTech and How It Drives Digital Transformation in Insurance' that comprehensively explains why InsurTech is the talk of the town in the insurance sector!
What we would particularly love for you to check out in the piece?is how our LLM-powered CX Platform - Tars Prime - simplifies the three pivotal stages of the insurance customer journey - Acquisition, Policy Management and Retention.?
?? What Tars Is Reading???A couple of months back, BCG published a conversation with Christopher Freese, the managing director and senior partner of BCG’s Insurance practice, titled?"Leading Insurers Are Having A Generative AI Moment".?
What stood out to us in particular was this bit from the piece:
"The biggest savings, ranging from 40% to 60%, are expected to come from productivity gains in customer service.?
We estimate that up to 35% of customer service agents’ time is spent retrieving information in policies, terms, and other documents. In such tasks, Gen-AI can more than double?agents’ productivity."
?? Spotlight Feature ??
LLMs: The Next Frontier of InsurTech
Before we jump into LLMs, it's vital that we understand three central features of the Insurance business:?
1??Insurance policies?are a complex product - with questions about premiums, coverages, exclusions, etc, always rife?in a potential policyholder's mind.?
2??Insurance policies are also often a recurring commitment, which means monthly/quarterly/annual?renewals are key to the business model.
3??Risk Assessment and claim Management require insurance professionals to refer to reams of policy documentation and customer-specific data.?
It is this context that?gives InsurTech such fertile ground to drive digital transformation!
Now coming to?Generative AI?- the bold new frontier of InsurTech.?
Practically, it's helpful to think of Gen-AI as?a set of functional blocks that can be assembled in different ways to deliver different applications.
These building blocks are????
??Search: To search through large volumes of text quickly and efficiently. This is incredibly?helpful for building underwriting?co-pilots?- aiding those insurance professionals?who need to instantly find information on clauses, claims reports, and other supporting documents.
??Summary: To summarize long pieces of text into shorter, more concise versions. This is helpful?for those professionals who need to summarize policies for customers or claims reports for adjusters.
??Service: To instantly generate new content, such as policy explanations, claims reports, and customer responses. This can help CX pros?automate repetitive tasks in an intelligent fashion, thereby taking customer satisfaction - an oft-cited sore point in the claims process - through the roof.
Industry Talk ??
According to the latest research from Oliver Wyman, a remarkable?25% of US Insurers plan to have LLM solutions in production by the end of 2023????
Did You Know?
The world's first chatbot - ELIZA, was created at MIT as?far back?as 1966.
That's All For This Week.
Happy automating ??
Ish from Tars