Insurance is an industry driven by giving customers peace of mind. When people purchase policies, they’re investing in a safety net to protect against the unexpected of everyday life.
Artificial intelligence (AI) is an opportunity to strengthen that safety net via revenue-generating innovations that amplify the customer experience. For proof, look no further than health. A McKinsey and Co. study found that AI can help health insurers generate up to $1.24 billion in extra revenue.
At the customer-facing level, AI empowers policyholders to have more informed and intuitive interactions with providers. In terms of product development, brands can leverage AI and its data-driven insights to build customer-centric solutions and packages that build customers’ confidence and inspire them to spend more with their providers.
With that increase in revenue, companies can reinvest and continue innovating to help their customers feel safe and secure for years to come.
Development of new and innovative products
Policy selling remains at the heart of the insurance business model. Even the most innovative concepts or solutions are all developed in service of broadening coverage options for individuals or companies. And while some envision AI quickening product development, its ability to leverage data can bring more innovative, profitable ideas to life.
AI can spotlight specific behaviors and usage patterns within the current line of products to inform the development and creation of new offerings. During the prototyping phase, AI can analyze those findings, specifically focusing on where new revenue streams can stem from and beginning the process of creating these services.
Taking it a step further, this data can build user-based policy packages and bundles that provide customers relevant coverage and value—and that can implore customers to spend more with a provider.
Identifying winning products and discontinuing unsuccessful ones
From a dollars-and-cents perspective, continually pushing an unsuccessful product is equivalent to throwing money away. To better serve the bottom line, AI can also assist in real-time assessment into where products are succeeding or failing in terms of revenue generation.
Specifically, AI can zero in on winning products that are meeting or exceeding their revenue-generating goals. Furthermore, AI can find common denominators among successful products and provide insight into where they can be improved. It can do the same with underperforming services sunsetting the ones that aren’t generating significant revenue. AI can shine a light on where insurers should invest their resources to maximize earnings.
Proactive intervention to reduce cancellation
Policy cancellations represent a significant chunk of lost revenue for insurance companies. Getting out in front of policyholders looking to stop service can help boost earnings and ensure a memorable customer experience.
AI can help identify trends among at-risk consumers, enabling insurers to reach out to customers and offer improved service. AI insights can alert insurers to which policyholders need that extra attention and suggest data-driven retention actions that offer new services or upselling opportunities that can retain or grow someone’s business.
These AI-enabled targeted engagement approaches can assist in ensuring cancellations can be pre-emptively addressed and potentially negated so revenue targets don’t fall.
The more revenue insurers can deliver, the more peace of mind they provide their customers. AI’s power to innovate product development and customer retention provides tremendous revenue-generation potential—which can be invested back into the insurance products and services that provide that feeling of security.
Endava sports a broad array of industry experts and experienced technological specialists that can build next-generation insurance solutions calibrated toward your revenue-growing targets.
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