Welcome!

Machine Learning Authors: Carmen Gonzalez, Bob Gourley, Yeshim Deniz, Liz McMillan, Elizabeth White

Related Topics: SYS-CON MEDIA, Machine Learning , Artificial Intelligence, @CloudExpo, @ThingsExpo

SYS-CON MEDIA: Blog Feed Post

Insurance Industry's #DigitalTransformation | @CloudExpo @AppDynamics #ML

The web, mobility, and social media have introduced new sources of truth for the modern consumer

Digital Transformation in the Insurance Industry
By Omed Habib

The insurance industry is well aware that digital transformation is coming, even if some CIOs can’t really say what their individual companies will look like at the end of it all. In a survey of thousands of C-level execs around the world, insurance came in among the top five industries that are most likely to see “moderate to massive” digital disruption within the next 12 months. Only 20 percent of business leaders felt that they had the talent they needed to transform the enterprise, though. Here’s a closer look at what’s coming next in the exciting new era of software-defined insurance companies.

The Growth of the Insurance Model
The basic business model of the insurance industry hasn’t changed much since Edward Lloyd opened his coffee shop for seafaring folk in London in 1688. In the decades after Shakespeare passed away, Lloyd’s of London became a hotbed of intelligence on which ships had been seen where, how they fared on the open sea, and how likely they were to come into port with a healthy profit. The management at Lloyd’s created marine underwriting, insuring the riskiest of enterprises at the time.

In the three centuries or so that followed, insurance spread out to cover risk in many aspects of life, but the business model stayed constant. Actuarial experts with specialized knowledge on consumer and business risk assigned fees, and intermediaries made recommendations to customers. Now that era has come to a permanent close.

The web, mobility, and social media have introduced new sources of truth for the modern consumer. Comparison of side-by-side alternatives are instantaneous and comprehensive. Mobile device apps have ratcheted up expectations for insurance services that are autonomous, fast, and simple. In many cases, recommendations from networks of friends and family have replaced the insurance salesperson entirely. Just as web-enabled airline websites devastated the travel agency industry, software-defined insurance companies are sinking the ancient insurance business model.

How Online Insurance Simplified Complexity
One of the earliest software-defined insurance carriers, Esurance, opened its web-based car insurance services in 1999. It solved the problem of the time-consuming quote process that tended to end up with non-comparable policies.

The biggest innovation of Esurance was to break up the policy into components that could be added or removed by the consumer, moving the locus of information control out of the hands of the insurance agent. Many other companies followed, competing on capabilities of their websites. By the time Allstate bought the company in 2011, Esurance was valued at $1 billion.

The next generation of insurance tech transferred greater information control into the hands of the consumer. At the same time, it gave insurance carriers better information to use in assessing risk and establishing premiums. This took the form of:

  • Mobile apps that allowed simple account management tasks, tracked repair updates, and offered answers on insurance-related questions. These were always-on and available whenever the consumer had time, instead of during business hours.

  • Greater processing power and big data analysis allowed carriers to crunch more data in less time.

  • Web-based tracking provided customer data that was funneled to email for lead generation.

More and more, the essential core-value proposition of many insurance companies subtly changed from writing the most accurate policies to offering the most customer-centric brand. Geico became the nation’s number one insurance advertiser, betting $1.18 billion in ad spending on its brand. For Geico and Progressive, this kind of branding has paid off, but others in the same vertical have not seen the same kind of results. The larger carriers have consolidated their market dominance through better tech.

How Insurance Companies Are Becoming More Like Software Companies
In many ways, almost all companies are now considered software companies to some degree. Thanks to software, here are a few of the ways that innovative insurance companies are more agile than ever before:

  • Policy overview: Most companies have a secure sign-on area of the website or in the app to review policy details. Because of the fluid identity of online viewers, it can prove difficult for companies to definitely identify all the policies of a single individual or family.

  • Mid-term adjustments: Policies normally don’t change over the coverage period, but sometimes a change is big enough to affect the price. For example, the change of a ZIP Code, or even different streets in the same neighborhood, can change the price of coverage.

  • Loss notification: Many apps allow customers to begin a claim up to a certain point. This is one of the biggest areas for developers to focus on in terms of responsive AI that can ask the right questions.

  • Checking claim status: Most insurance companies have a place to check the status of a claim, but it is usually a field that must be updated manually, so it is not always current. Many times, the information isn’t sufficient, prompting a call for clarification. This area deserves more attention for automation and back end integration with other stakeholders in the claims process.

  • Directory assistance: Some insurance apps add value by providing information tangentially connected to insurance, such as a garage finder for car repairs.

Still, a survey of U.S. policy holders found that only 39 percent said that their insurance providers communicated with them along their preferred channels, such as SMS, email, or mobile apps.

The Next Wave of Insurance Tech
In many ways, mobile devices were merely the first step on the way to the rapid adoption of wearables. It’s no wonder that many insurance companies are already looking for original ways to provide value across the tiny screens of wearables.

According to 2014 survey data by Strategy Meets Action, nearly a quarter of U.S. insurance carriers (22 percent) reported they are already developing a strategy for wearables. Claims assessments, risk management, and data collection for telematics are three of the primary use cases for wearables and other emerging technologies like IoT.

Along those lines, an insurance company recently conducted a test of a Google Glass-type technology for claims adjusters. Video and images of the accident site were transferred directly from the field adjuster to the catastrophe division for faster claims processing. In the future, augmented reality can provide two-way data streams for adjusters in the field and their co-workers at the back end for more accurate decision-making in real time.

New Languages for Insurance
Many people still think of programming for insurance in terms of mainframes, COBOL, and Pascal. While there are legacy IT pieces still out there, insurance today is about enterprise development, mobile apps, and the cloud. In fact, many mainframes are making the complex transition into de facto cloud data centers running the latest Java deployments.

The impact of the modern stack is clear in the fact that Java, Python, and C++ still reign as the top choices for enterprise development in just about every industry. Java has many enemies in the coding world, but it still leads for large-scale deployments. Surprisingly, .NET is another leader, identified as the number one preferred enterprise development platform in a survey by Forrester.

The expanding volume and velocity of data is also creating a need for insurance developers proficient in R, Julia, Hadoop, and Scala.

The Problem with Millennials
At the same time insurance companies are planning ways to make the best use of emerging tech, they are also trying to adapt to the life preferences of the largest purchasing block in the population today.

On the plus side, millennials are more than two times as likely to buy insurance online, according to the latest Gallup polls. Twenty-seven percent of millennials are comfortable with online purchasing, compared to 11 percent for all other generations. Overall, 74 percent of the total population purchased a policy after talking to an agent. Because of the growth of AI chatbots and the availability of streaming video, millennials are likely to possibly do more without agent interaction in the years ahead.

On the negative side, millennials represent the largest number of customers who are actively disengaged (27 percent) or indifferent to (42 percent) their insurance carriers. That’s a recipe for greater churn and engagement wars among insurance carriers. The primary way that carriers are looking to improve that engagement is through better customer experiences.

Gallup suggested that messages related to performance and security appeal to the millennial’s concern for protecting private information. Simplified flow for completing coverage changes was another way that millennials gauge performance.

How Insurance Companies Can Improve The Customer Experience
As more insurance companies adapt to the latest hardware and software, they are discovering a corresponding need for optimization and performance monitoring to deliver on the promise of the technology. Customers have come to expect peak performance, reliable stability, and uptime. This can be especially difficult because many insurance carriers still operate using a mix of legacy and custom development applications.

AppDynamics’ application performance management for the insurance industry is tackling challenges like these head-on, before they put a drag on the customer experience. These systems can’t be productive without careful attention to performance, usability, and availability. To end users, the digital experience of their insurance provider has an effect on their perception of the overall brand.

Learn More
Find out more about our product or start your free trial today.

The post Digital Transformation in the Insurance Industry appeared first on Application Performance Monitoring Blog | AppDynamics.

More Stories By Jyoti Bansal

In high-production environments where release cycles are measured in hours or minutes — not days or weeks — there's little room for mistakes and no room for confusion. Everyone has to understand what's happening, in real time, and have the means to do whatever is necessary to keep applications up and running optimally.

DevOps is a high-stakes world, but done well, it delivers the agility and performance to significantly impact business competitiveness.

@CloudExpo Stories
WebRTC is about the data channel as much as about video and audio conferencing. However, basically all commercial WebRTC applications have been built with a focus on audio and video. The handling of “data” has been limited to text chat and file download – all other data sharing seems to end with screensharing. What is holding back a more intensive use of peer-to-peer data? In her session at @ThingsExpo, Dr Silvia Pfeiffer, WebRTC Applications Team Lead at National ICT Australia, looked at differ...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
IoT offers a value of almost $4 trillion to the manufacturing industry through platforms that can improve margins, optimize operations & drive high performance work teams. By using IoT technologies as a foundation, manufacturing customers are integrating worker safety with manufacturing systems, driving deep collaboration and utilizing analytics to exponentially increased per-unit margins. However, as Benoit Lheureux, the VP for Research at Gartner points out, “IoT project implementers often un...
SYS-CON Events announced today that Technologic Systems Inc., an embedded systems solutions company, will exhibit at SYS-CON's @ThingsExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Technologic Systems is an embedded systems company with headquarters in Fountain Hills, Arizona. They have been in business for 32 years, helping more than 8,000 OEM customers and building over a hundred COTS products that have never been discontinued. Technologic Systems’ pr...
SYS-CON Events announced today that IoT Now has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. IoT Now explores the evolving opportunities and challenges facing CSPs, and it passes on some lessons learned from those who have taken the first steps in next-gen IoT services.
SYS-CON Events announced today that WineSOFT will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Based in Seoul and Irvine, WineSOFT is an innovative software house focusing on internet infrastructure solutions. The venture started as a bootstrap start-up in 2010 by focusing on making the internet faster and more powerful. WineSOFT’s knowledge is based on the expertise of TCP/IP, VPN, SSL, peer-to-peer, mob...
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and containers together help companies achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of Dev...
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @CloudExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
The security needs of IoT environments require a strong, proven approach to maintain security, trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vic...
With billions of sensors deployed worldwide, the amount of machine-generated data will soon exceed what our networks can handle. But consumers and businesses will expect seamless experiences and real-time responsiveness. What does this mean for IoT devices and the infrastructure that supports them? More of the data will need to be handled at - or closer to - the devices themselves.
SYS-CON Events announced today that Dataloop.IO, an innovator in cloud IT-monitoring whose products help organizations save time and money, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Dataloop.IO is an emerging software company on the cutting edge of major IT-infrastructure trends including cloud computing and microservices. The company, founded in the UK but now based in San Fran...
Building a cross-cloud operational model can be a daunting task. Per-cloud silos are not the answer, but neither is a fully generic abstraction plane that strips out capabilities unique to a particular provider. In his session at 20th Cloud Expo, Chris Wolf, VP & Chief Technology Officer, Global Field & Industry at VMware, will discuss how successful organizations approach cloud operations and management, with insights into where operations should be centralized and when it’s best to decentraliz...
In his session at @ThingsExpo, Sudarshan Krishnamurthi, a Senior Manager, Business Strategy, at Cisco Systems, will discuss how IT and operational technology (OT) work together, as opposed to being in separate siloes as once was traditional. Attendees will learn how to fully leverage the power of IoT in their organization by bringing the two sides together and bridging the communication gap. He will also look at what good leadership must entail in order to accomplish this, and how IT managers ca...
In his session at 20th Cloud Expo, Mike Johnston, an infrastructure engineer at Supergiant.io, will discuss how to use Kubernetes to setup a SaaS infrastructure for your business. Mike Johnston is an infrastructure engineer at Supergiant.io with over 12 years of experience designing, deploying, and maintaining server and workstation infrastructure at all scales. He has experience with brick and mortar data centers as well as cloud providers like Digital Ocean, Amazon Web Services, and Rackspace....
The financial services market is one of the most data-driven industries in the world, yet it’s bogged down by legacy CPU technologies that simply can’t keep up with the task of querying and visualizing billions of records. In his session at 20th Cloud Expo, Jared Parker, Director of Financial Services at Kinetica, will discuss how the advent of advanced in-database analytics on the GPU makes it possible to run sophisticated data science workloads on the same database that is housing the rich inf...
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
SYS-CON Events announced today that Cloud Academy will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Cloud Academy is the industry’s most innovative, vendor-neutral cloud technology training platform. Cloud Academy provides continuous learning solutions for individuals and enterprise teams for Amazon Web Services, Microsoft Azure, Google Cloud Platform, and the most popular cloud computing technologies. Ge...
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
Wooed by the promise of faster innovation, lower TCO, and greater agility, businesses of every shape and size have embraced the cloud at every layer of the IT stack – from apps to file sharing to infrastructure. The typical organization currently uses more than a dozen sanctioned cloud apps and will shift more than half of all workloads to the cloud by 2018. Such cloud investments have delivered measurable benefits. But they’ve also resulted in some unintended side-effects: complexity and risk. ...
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.