Insured for Growth – How Automation is Turbocharging the Insurance Industry

Nischay: Hello everyone and welcome back to another exciting episode of the Zinnov podcast, Hyper Intelligent Automation series, your one-stop destination to listen to the pioneers and trailblazers of the automation industry. I’m Nischay Mittal, Principal and Global Head for Automation at Zinnov and I will be your host today.

The automation space has come into its own, especially in the last couple of years with large ticket size M&A deals, successful IPOs and millions of dollars being poured into in terms of funding. Automation has become synonymous with digital transformation charters of leading organizations and newer automation use cases are being explored across industries.

Insurance is one such industry that has been a pioneer in adopting automation and reaping the benefits thereof. However, what does the future really look like for insurance companies with the evolving automation landscape and what will be some of the disruptions that will take this industry to the next level of innovation?

To shed light on some of these questions, we have with us Lori Pon, Director for Claim Strategy and Innovation at Auto Club Group or ACG. She oversees governance of the claims technology roadmap and is responsible for managing implementation of enterprise software solutions aligned to Contact Centers and P&C insurance operations.

Welcome to this episode, Lori.

Lori: Thank you so much for having me.

Nischay: Perfect. So let’s dive into this interesting part of the conversation. Lori, you have had a phenomenal career progression spanning more than 20 years across Sales, Operations, Claims Transformation Management and Contact Center in the insurance industry.

With the advent of COVID, claims processing took a huge impact. There was an abrupt surge in claims in life insurance, small business insurance, and even travel insurance. Can you tell us about the major disruptions that have happened in the insurance industry over the last two years?

Lori: We actually saw a dip in frequency because people weren’t on the road. People were at home…You can tell if you have a water leak or a potential fires. We saw some trending in terms of less accidents, but when people got on the road, typically they were ready to go and we saw severity increase. So the severity of the loss to the car, we saw creep up. So those were some of the trends. A couple of other trends that we saw is an increase in our customers’ ability and willingness to self-serve. So we have photo estimating channels and pre-COVID we saw customers saying, “Yeah, I’ll do it.” And then they get into it. “Well, no, let me have someone come out to my home and look at my car. Or look at my home.” And we’re seeing customers have a much higher degree of comfort with self-serving in working with us.

We implemented bi-directional texting. We see an increase in customers willing to chat back and forth with us regarding their claim, which helps both us and our customers in terms of speed of response, speed of understanding where the car is or understanding status or meeting something from our customers.

We’re able to exchange much more seamlessly and frictionlessly. Another big trend that we saw is we use virtual estimating channels in our home… property line of business. So customers were willing to do a video chat to assess damages, to allow us to triage the loss. We could see if we could adjudicate it using those channels or if we needed eyes on site. Do we need a large loss adjuster? Do we need a field adjuster? So it really helped us partner with our insurance to improve the convenience and speed with which we can run your claim service. So those were just a couple of trends.

One other trend that I saw is the ability for us to adapt from brick and mortar to more virtual channels. So really the shape of work and the ability to team has really changed. And it’s also improved our ability to recruit outside of our footprint. So where we have a large footprint of states in the Midwest and the Southeast, now really with virtual channels, if your job can be completed using the internet and using virtual channels, it gives us more flexibility in terms of talent pools. But we are leaning more into Artificial Intelligence and Intelligent Automation to help us be more productive, efficient, and more transparent.

Nischay: Great insights, Lori, thanks for sharing these. So, two key insights which came out, first of course is customers becoming more and more comfortable with leverage of technology rather than physical touch points. And I think the second interesting trend you shed some light on was around the talent pool itself.

So let me quickly touch upon both of these, Lori. Digging deeper into the first one… Of course, while I think you spoke about some of these technology areas, be it self-service, be it virtual assistance, or even video conferencing… I think another key component just to dive deeper into this whole technology nuance is around Automation. So if you can shed some light also on some of the key Automation initiatives which help you really circumvent some of the challenges that you witnessed over the last two years. And also if you can highlight some specific use cases that you started implementing in the post-pandemic era.

Lori: Sure. We had two huge automations in 2020. So COVID, we went home in March and I was incubating a bi-directional texting palette. So it allows me to invite you to chat about your claim. You can send me pictures, you can send me videos, and we didn’t have that in place prior to going home. So we were incubating it. We had two Insuretechs that we were working with to pilot their tools, both were amazing. And we selected a tool in May. And then by September, we rolled out bi-directional texting to over 900 team members in our footprint. And what that allowed us to do is communicate more seamlessly. And then we worked with our bi-directional texting partner to beta-test their mobile app and then their advanced analytics powered by Google Looker.

So one of the things that really helped us is when we first started down the road of using the ability to chat and SMS, is we didn’t have analysis at scale. So what the analytic tool allowed us to do is analyze our text messages and there was a positive sentiment and a negative sentiment bucket. It really helped direct us to what texts are amazing and we can give rewards and recognition, and what texts need potential customer service recoveries.

And the other piece that it allowed us to do is see in real time, so we have widgets and dashboards. We’re looking at response time, time since the last message, texts that appear to be abandoned and where we need to take action. So that tool has been amazing. The sentiment analysis at scale really directs us in a very focused way to how we’re doing. We’ve also been able to blend our NPS data with claims where we text and there is a clear CSAT gain when we use that intelligence. And we’re also working with the vendor, the chat functionality, the Virtual Assistant, we’re able to consume and send business events that allow us to proactively notify our customers of milestones in their claim. So the chatbot in Virtual Assistant can check back instead of us getting a phone call or our Contact Center getting a phone call or an email.

So we’re trying to work and continue to build out functionality, and we love that we can A/B test with our vendor and we’re also involved in design thinking sessions. Another piece of really cool automation that we implemented last year was some of our photo estimating channels, making those more robust, we’re moving to straight through processing. So potentially when we get in your photos, working with our estimates partner and depending on the damage in our rule set, allowing us to get to true touchless claim.

We’re in the process now of sending data points and areas of impact, so that we can even recommend the most optimal inspection channels. So we’re using AI, we’re using ML, we’re working with our vendor partner to build really complex algorithms, so that we can direct you… Are you ripe for photo estimating? Can you go to one of our direct repair shops? Do we need to come take a look at your car ‘cause there’s serious damage? Is it a total? Do we need to tow it? so we can avoid expenses and we can avoid churn in the claim if we get it right from the first notice of loss or very shortly thereafter. So we are in the process of using AI to predict the appropriate inspection channel.

And on the home side, we’re using computer vision, we’re using virtual inspection experiences, so that potentially we don’t need eyes on sight. That’s a very expensive model. We have customers using AI in their phones to capture measurements. We’re also partnering with companies that look at weather. So we all have had experiences with natural disaster. It can be terrible. And having staff there, that’s an ultimate moment of truth to be there with your customers when they experience huge losses to their homes, their property, their cars. So we’re partnering with vendor partners across the industry that have meteorologists and weather scientists that can help us predict and better track potential impacts to our policies and force across our footprint.

So we’ve implemented models and AI in that space to help us with response and to help us to get the right resources faster to areas that have been impacted by natural disaster and our policy holders are impacted. So those are just a couple of different examples that I can give and in the context in our space, we’ve implemented a gamification platform.

Working remotely you can lose contact with your community of team members. And so we’ve implemented gamification in one of our Contact Centers. We’ve implemented Voice Analytics. So we’re able at scale to assess… Are you talking over the customer? Are you rushing? Is there a long awkward pause? Are you doing really well and sending out a big thumbs up for how you’re working with our customers when they have the need to touch out to us?

So those are just examples. We implemented a brand new CRM with one of the huge CRM companies. So we’re continuing to iterate out experiences, use Intelligent Automation like chatbots so that we can divert very easy to handle calls into more self-serve automated channels.

Nischay: Perfect. I think, Lori, you touched upon a lot of great use cases, especially aligned to enhancing of customer experience and employee experience.

So this gives a great segue to the other area I wanted to touch upon, how the narrative of automation has really evolved. So while earlier the narrative was restricted majorly to very hard ROI metrics such as cost savings and the reduction among others,, today there is a growing trend of looking at more strategic outcomes, such as experience enhancements spanning customer experience, employee experience, and even partner experience. So what are your thoughts on this?

Lori: It absolutely has to be balanced, because if you’re only focused on hard metrics, like, a reduction in staff so FTE, or if you’re focused on this has to be more productive and I want to see calls cut by X percent, you could miss out on some of those subtle nuances. And we’re a big believer as a membership organization of allowing our customers to have their channel of choice.

But in that channel of choice, let’s make it amazing. So if you migrate from a digitized experience, like say you’re chatting us to get a tow, we have a huge club and you can chat us, or maybe you’re using Alexa, a Virtual Assistant to come tell you. But if there is churn, like maybe you don’t feel safe in your area, we do want you to be able to have channel of choice, let us identify and verify your needs, but make sure that we’re informing our team members along the way, whether it be someone manning our chats, if it needs to be human-assisted, or if it actually transitions into a phone call that we’re very clear about your intent and what you need us to help you with. And we’re seeing that automation can enhance the experience. Even if we can’t get it fully automated, there are gains. And we’re looking at things like NPS, we’re looking at things like user experience.

Nischay: Great, Lori. I think you spoke about some of the key outcomes or metrics such as NPS, such as user experience, even CSAT for that matter. I think the one challenge that we see our enterprise customers grappling with is, how do you really attribute automation to these metrics, considering that there may be a lot of things at play leading to these outcomes.

Lori: We’re looking at things like, so we have a mobile app and you can file your claim on our mobile app. A couple of things that we did, we rolled out the mobile app. We had a panel of customers give us feedback when it was in beta. So it wasn’t productionized. So we’re trying to tailor solutions that resonate with the customer. So I think there’s a discipline with implementing automation and you have to really be focused on optimization and adoption.

One of the examples I can give you is, we implemented an enhanced digital payment platform in November of 2020. And a couple of things that we watch is what is the behavior of our vendor community? What is the feedback from our customer community? Where are we seeing churn and about a year later, so we’re almost a year, probably 15 months down the path… We’re working with our Fintech on how we can address churn points, how we can address adoption issues, how we can look at our data. So data tells a story. But you have to be very, very disciplined about looking at the data. And so we’re trying to look at those different levers and really be very insightful of organizational change management from a customer standpoint, from a user standpoint, working with our vendor community to talk to them about our churn and can we have a voice… And we like to partner with vendors that allow us a voice in their roadmap, that invite us into their design thinking sessions, and really have thought-partnership conversations so that we’re iterating together and we’re improving together.

Nischay: Got it. These are all great perspectives, Lori. And while we’re talking about employee experience, I also want to touch upon this recent global mega trend around The Great Resignation which is definitely a burning issue in the talent space today. As per stats, more than 4 million workers have been quitting their jobs every month since April 2021. And given this challenge that enterprises face today, there is increasing focus on leveraging technology and more specifically automation in order to provide a superior employee experience so as to retain employees and also at times attract new talent. What are your thoughts in this regard, Lori, of using automation as a lever to really circumvent the Great Resignation?

Lori: I think a couple of things, your user experience has to be amazing for your customer experience to be amazing. And your user experience is buttressed against the tools and the challenge of the work and the interesting aspects that you can tackle in your work assignments.

And most of us liked to be challenged and be able to have the autonomy and the resources to deliver an amazing work product. Whether that’s a customer experience, whether that’s working on delivering a great package of work or a process. So a couple of things that we’re focused on at ACG is we are going through an accelerated insurance policy modernization effort because we still have legacy systems that I am certain would not resonate with Gen X, Gen Y. And when you want to attract the top talent, you have to have an environment and the capability to offer tools that let people be their best. And one of the things that we’re leaning into, we’re leaning into RPA, how can we take away transactional activities that are easy to automate and allow our staff to focus on more enriching and rewarding work. We as organizations have limited resources, budget and time. So you really have to be dialed in with your business case. So I prepare one-pagers for our C-suite, which focus around trying to get funding, but it’s one page. You have to be very, very disciplined about every single word on that page and make sure that it adds value, but it gives that elevator pitch of here’s the strategic funding that I’m asking for. Here’s the alignment to our strategic objectives. Here’s the benefit to the company, to the customer and to our end user. And then we’re looking also at what’s the cost, what are the KPIs that we expect to influence if we fund this project? So you have to be really, really disciplined. And I think, you know, with the Great Rresignation, and most of us working virtually you have to be very deliberate with how you’re engaging. So we have contests, like in my adjusting unit, we were doing one with guess my dog, guess my workstation. And it just added some fun. We do virtual touch bases, but we do virtual bingo. You know, we have different events where we’re engaging our staff to make sure that we have a community where we don’t lose the human touch. We have a joke of the day that we send over. We open up an IM thread in the team so that we’re able to communicate with one another while we might not be in the same office and able to have a physical coffee with one another, you can have a virtual coffee.

So there’s a couple of very intentional things that you can do. And on the automation end, we try to make sure that our staff doesn’t fear what automation could do, because what it will allow you to do potentially is gain a new skill set, do something that allows you to build a more complex skill set, a more enriched skillset.

And so with the staff, making sure that you’re planning, where is your next step? What are your aspirations? What do you like to do? And how can we give you work assignments that lead in that direction? So that in the event, that part or all of your work duties are automated, you can then put your name in the hat for a more enriching job. So those are some of the things we’re looking to balance and we name our bots. We try to humanize the bot and then more importantly, we ask end users for feedback. And then we go try to retune the bot. If there’s something in the process is creative work or too many exits to a manual touch. So you have to make sure that you’re getting end user feedback and you’re examining where you could improve the experience, because then you have less resistance to automation and more of an embracing than a resistance or a thought that it might not be the best channel for the customers of the company or end-users.

Nischay: Great. So the correct way to look at this is almost in terms of a combination of behavioral and technology aspects. While the employee behavior might be difficult to influence, I think technology and automation are really table stakes. So if you don’t provide a superior user experience to your point, I think it will be difficult to retain employees and chances for employee attrition are higher.

Shifting gears a bit. Now, Lori I’ve also wanted to touch upon this other global mega trend around sustainability. All the leading enterprises today, as you aware, are worrying about laying down their sustainability objectives and investing billions of dollars in reducing their carbon footprint. Again, automation has emerged as a key lever to support enterprises in their sustainability initiatives. Be it paperless people as office or be the efficiency in supply chain among other use cases. So how do you see sustainability shaping up within your firm, Lori? And are you also looking to leverage automation to drive your sustainability goals?

Lori: Sure. So you mentioned one. We were not the first to paperless and we implemented a Google Cloud platform. Now that we’re remote, we’re looking at, do we need a building? We have sold quite a few of our buildings. How can we make sure that from a connected car perspective, we work with the OEs? So the big car companies out there, how can we build better experiences, even from an emission standpoint, you know, are we prepared to repair or, do we have thought leadership and at the table around how the car can be connected and safer? As an example, AAA has a telematics app. And we allow you as a member, not buying the use based insurance, but as a member, having a membership card to download our AAA drive app. And what it does is, it offers you scores for your driving journeys and it encourages better behavior. It encourages safer driving. And whether that be your child or whether that be someone in your household that you’re worried about and could use that proactive coaching. So we’re trying to work in this ecosystem to help build a safer and better community. And that’s one small example of partnering across the ecosystem and offering a tool like used based insurance, even if you’re not buying our UBI, we want you to have the tools so that you can drive safer and be safer on the road. Your driving better, protects the community.

And on the side of sustainability, ACG is very engaged. Almost 99% of our contact centers are now working from home. So that’s less commuting, less emission. So we are trying to be a more contemporized employer and offer those kinds of benefits that allow you to balance work and life.

Nischay: So Lori, before we wind down, any advice for an insurance company who is just getting started with their Intelligent Automation programs, what would you say are the three best practices you would recommend to them?

Lori: The first step in the journey is to begin it. I would recommend that you start off small. You find a partner that has experience in your industry and understands your use case. I would recommend that you find a partner that is collaborative, that you have a seat at the table in their roadmap discussions. I would absolutely recommend that you look at your process. You optimize first and then you automate. Along the journey of Intelligent Automation, many of us have a few battle wounds for not being disciplined and rushing to try to get something implemented because it’s sexy, we think it’s easy to plug and play, but there is a discipline with Intelligent Automation.

But there are a lot of amazing tools out there that can help you be more efficient and help you direct your human talent to really amazing challenging work and offering experiences that rival some of those big, giant behemoths in the CX ecosystem, but you have to start the journey. And then once you start, start small, but make sure you’re iterating.

There’s a discipline with Intelligent Automation. You always have to look at what you’ve done and then add a little bit more tweak, add a little bit more. Within those journeys, you will have failures, but a failure can be the first step in learning. And then once you’ve learned, you are way more conversant and you have much more insight into that next step.

So the big piece is getting started and making sure that you have stakeholder engagement. And when you go to get funding for these initiatives, be prepared to discuss the alignment to strategic objectives, the impact of the customer, your end user, and what KPIs you’re confident you can start to improve with the investment.

Nischay: Perfect. So one, process-first approach. Second, I would say start small and be disciplined and iterative. Third, you mentioned finding the best fit partner, and forth being around metrics and KPIs are being in place. Perfect, Lori, thanks for sharing that. It’s almost like a playbook for any insurance company and final question, Lori, looking through your crystal ball, can you help us predict the top two big trends that you see at the confluence of insurance industry and the automation industry?

Lori: Sure, we’re moving away from RPA. Not that it doesn’t have an important piece in our business, but we’re really looking at AI. So deep learning. We’re looking at machine learning, really working with our vendor ecosystem with their AI models and how can we build out some really focused algorithms that help us be better and do better for our customers.

So it could be, how we offer your inspection when you call us, could we offer you the capability to self-serve to get your home claim started and potentially at some point touchless. So I think touchless is a big discussion that we’re having in the insurance industry.

And then we’re looking to move from a ‘detect and repair’ to ‘predict and prevent’. So there are amazing innovations with that connected car and how can you be more proactive with your customer base? Are your BI models offer you some suggestions on your driving? We score your journeys. We reward you for that better driving, but we also leave breadcrumbs around, were you interacting with your phone when you’re driving? Were are you speeding? So we would love to leverage that ability to predict and prevent, because if you’ve never had a loss, then what a great partner are we, if we help you protect your family, protect your property. So I think that whole prediction is really, really important. AI is a huge component in that piece. And then I think, leveraging AI to build out the capability to connect with your customers in their channel of choice and be very informed is going to be really, really important moving forward. And how do you build out frictionless journeys is really what we’re focused on as a membership organization. We’re looking at blockchain opportunities.

So I think just making sure that you’re aware of emerging trends, that is also a discipline. I engage in a lot of newsletters and industry webinars and panels to keep me very conversant. I also engage in conversations outside of insurance, so that I’m aware of what’s going on. I’m in a panel of executives and they’re from Target, and Home Depot, and the Marriott, and Hilton, and Instacart, very, very different companies. And it helps give me thought leadership on how can I apply their innovations to my industry. So I think also having that lens of looking out, instead of always being so insulated in your own industry is really, really important to keep you really aware of emerging trends that you can bring in, so that you’re hyper personalizing and getting that speed to market faster.

So that we’re always looking to figure out within our brand, how can we deliver a better experience, how can we hyper-personalize and meet you where you want to be met. That’s our goal, and make sure that you leave us more enriched and thinking, “Wow, I never want to leave AAA. That was so such an amazing experience.”

And I think that that’s what we all want, whether it’s a digitized journey or a non-digitized journey, but we do want to lean into those self-serve models because our customers are telling us we need that capability to do that, because it’s on our terms and it’s easier. So I think just that blend is really.

Nischay: Perfect. Thank you so much, Lori, for these extremely valuable perspectives. Our conversation has definitely left me with a lot of point of views to mull over. I’m certain our audience also had a lot of learnings from this episode.

Lori: Thank you so much for inviting me. It’s been a pleasure.

Nischay: Thank you everyone for tuning into this episode of Zinnov podcast Hyper Intelligent Automation series. We will be back with another episode and another leader soon. Till then, stay safe and take care.