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Tech everything risks alienating insurance employees

23 August 2021 Gareth Stokes

The obsession among local financial services firms with the rapid deployment of digital solutions risks alienating employees and creating disconnects between the digital and human customer experience. This disconnect, or gap between an employee’s skills and the insurer’s platform capabilities, was among the unintended consequences of the convergence of insurance with technology, discussed during the first day of the 2021 African Insurance Exchange (AIE) conference. A panel discussion titled ‘Insurance and technology converge’ considered how the industry might evolve against a technology backdrop, among other issues.

Sandwiched between insurance and technology

This newsletter will focus on the views shared by one of the three panellists, with whom we had a follow up interview on the fringes of the conference.  “In South Africa, as in the rest of Africa, there are huge amounts of funds being put into fintech and Insurtech; but as fast as we develop technology, criminals are developing ways in which to exploit that technology,” said Garth de Klerk, CEO at the Insurance Crime Bureau (ICB). He urged financial services firms to spend more time assessing their technology requirements so as to avoid complex and costly system implementations when a “hammer or pencil” could do the job just as well. “We have to go back to the basics to ensure that the client receives the best product; when insurance and technology converge you will always find a client somewhere in the middle,” he said. 

Another important consideration in the race to tech supremacy is that most insurance interactions have a human element. “We spend billions of rand developing technology, yet when we employ a human we expect them to be qualified, skilled and performing optimally without additional or ongoing maintenance,” said De Klerk. The argument was that the industry risked neglecting the human emotion, empathy and intuition that must exist alongside digital solutions to guarantee the overall customer experience. In other words, insurers must consider how their tech solutions ‘fit’ the needs of clients in conjunction with the capabilities of its workforce. This writer has countless examples of automated platforms that do things for technology’s sake, with little consideration for the impact on the end customer. More on that later. 

Regulation first, even for digital platforms

De Klerk’s final observation during his introductory remarks to the panel, was that digital platform blueprints and other tech-backed process improvements should be assessed through a regulatory lens at an early stage. He observed that just because technology made it easy to navigate through reams of customer data, this did not give developers carte blanche to do so… “Often, technology has to be throttled back to make sure that we do not overstep insofar the regulatory framework,” he said. We have heard mutterings about the Protection of Personal Information Act (POPIA) causing headaches in the fraud prevention space and it is no doubt presenting challenges to many insurers, insurance brokers and Insurtech start-ups that have allowed their imaginations to run wild during the digitalisation process. 

My first question in the post-panel interview with De Klerk focused on the skills mismatches that were emerging due to the convergence of insurance and technology; but he felt it necessary to outline a couple of issues that were not covered during the hour-long discussion. First, technology makes it possible to cover much more ground than ever, with the result that dependent human functions are being left in the dust. The ICB has found that additional expenditure on technology enables it to uncover hundreds of potential criminal syndicates; but it does not necessarily have enough human capacity to follow up on these leads. “If we were to take technology to its full value, instead of having 30 investigators, we would need 100 investigators to adequately assess the level of fraud being uncovered,” he said. Second, the level of service delivered by the integration of technology into the ‘front door’ of insurance firms often left much to be desired. 

Billions for technology; zero for our people

Anecdotally, many customers find that the artificial intelligence and machine learning chatbots that insurers are relying on as a first contact for customer enquiries are hopeless; but the experience following an escalation to a human customer support agent, where that is even possible, is equally disappointing. De Klerk said that the financial services industry needed to reconsider the balance of investment between technology and skills: “The industry is investing billions in technology without matching this investment in its people”. Poor customer service existed in the pre-technology age too; but the blind faith that many executives have in technology as a solution to this shortcoming is misplaced. 

My recent interactions with insurer and insurance broker platforms reveal many ill-thought automated processes. An insurance claim resulted in dozens of SMS updates being sent to my mobile, as if a young application developer had simply flagged the “SMS whenever the opportunity presents” checkbox before deploying the app. To make matters worse, the human customer services employee had no sight of this information, with the result I received multiple phone calls to confirm the content of the SMSs. The final insult was a second phone call from a different call centre agent who was unaware of the first call or the SMSs. Excellent customer service was intended but certainly not the outcome. Another digital design fail came courtesy an email, complete with link, asking me to confirm an order. Unfortunately, the link took me to a ‘new order’ screen with no obvious path to where I needed to be. 

More haste, less speed

“Speed to implement is a major issue,” observed De Klerk. “We identify a problem, we determine that we need a solution and we develop and implement that solution in record time”. This rapid-fire development and deployment leaves inevitable gaps and faults which can introduce significant risks in areas such as insurance claims. According to De Klerk, the push for speedier claims resolution in the life and funereal space is particularly problematic, because technology enables claims settlement way faster than the real world checks and balances needed to ensure a valid claim. If only platform development and deployment could take place keeping the old English adage ‘more haste; less speed’ in mind. 

We conclude with De Klerk’s closing remarks to the 2021 AIE discussion on the convergence of insurance and technology. “We are fortunate to have a financial services sector that is investing in technology, not only to service the client, but to protect the client against fraud and related crimes,” he said.  “Our future depends on investing in the right level and mix of skills [alongside technology] to allow the insurance industry to lead in both tech innovation and human customer experience”. The industry needs clever people, clever solutions and a clear focus on keeping a balance between human- and machine-led functions. 

Writer’s thoughts:
Three thoughts occurred during the AIE 2021 ‘technology and insurance converge’ panel discussion. First, technology is often disconnect with our on-the-ground reality; second, technology can deepen the divide between machine and human; and third poor, technology integration risks leaving employees ‘hanging out to dry’. We would love to hear about some of your experiences and frustrations following recent interactions with digital insurance / insurance broking platforms. Please comment below, interact with us on Twitter at @fanews_online or email us your thoughts [email protected]


Added by Gareth Stokes, 31 Aug 2021
Interesting points @Quinton Knox, all valid... Enjoyed your revised take on the "hammer and nail" problem and your observations re AI.
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Added by Gareth Stokes, 31 Aug 2021
I enjoyed your order of chaos "list" Paul. Insurance platform developers do not have the scale of an Office 365 [or other modern day cloud-base service provider] that allows for ongoing beta testing in live...
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Added by Gareth Stokes, 31 Aug 2021
You and I must have the same insurer/insurance broker @Wally... Some basic user acceptance testing would solve this problem, reduce frustration, improve communication and save time and money!
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Added by Quinten Knox, 23 Aug 2021
A few general remarks.

- The "convergence of insurance with technology" is not driven by insurance companies, intermediaries, or clients. It is driven by Big Tech (BT). Technology companies have a vested in selling their products, and the insurance industry is the perfect golden goose for BT.

- If you have a hammer, everything looks like a nail. BT is 'creating solutions' for problems that do not exist.

- Artificial intelligence (AI) is punted everywhere as a silver ullet for just about everything under the sun. Little, if any, attention and focus is given to human intelligence.

- AI is not capable of building intermediary/client trust relationships. By definition, AI is just what it says it is - artificial. AI is devoid of essential components of the human condition: including empathy, insight, discretion, dignity, respect, ethics, morals, values and interpretation.

-AI is prone to bias, in particular algorithmic bias. Somewhere someone is writing the rules by which algorithms operate. Who writes these rules - BT and computer programmers? What happens inside the 'black box' of AI 'solutions'?

- Who is accountable and responsible for AI outputs, such as AI treating or not treating customers fairly - the tech companies? I very much doubt it.

- Machine learning is not human learning. Are we all to be condemned to ignorance, stupidity and uselessness at the altar of technology? Are we destined to become disposable units of production?

- Is the insurance industry being overtaken by a Technocarcy, and what are the implications?

Technoligy is only a tool. It is not an answer.
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Added by Paul , 23 Aug 2021
The order of chaos:

Client has a requirement.
Brings in IT co or division that develops proposal/ solution
Client accepts this.
Design and development occurs.
Semi functional product emerges supported by lies,bugs etc all driven by fear and need.
Release of product to consumer
Result:Confusion ,frustration and rejection.
This cycle is then repeated until proven useless.
Cycle then restarts.

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Added by Wally Walton, 23 Aug 2021
So true. I received, as broker, 7 messages from the insurer, not one of which assisted the client waiting for assistance one bit.
They ask for my PI policy and when I submit it they send me an enquiry reference number and 2 days later a confirmation that my enquiry has been completed.
No idea that you can move all the paper or messages but if it does not address the client need, nothing has been achieved.
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