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Watch Christopher M. Wells, Ph. D., Indico VP of Research and Development, and Michelle Gouveia, VP at Sandbox Insurtech Ventures, in episode 30 of Unstructured Unlocked with Daniele Groves, Director of Product Management at Guidewire Software.
Michelle Gouveia: Hey everyone. Welcome to another episode of Unstructured Unlocked. I’m Michelle Govea.
Christopher Wells: I’m co-host Chris Wells,
MG: And today we are very excited to be joined by Danielle Groves, the director of Strategic Development Programs at Guidewire. Danielle, welcome to the podcast.
Danielle Groves: Thank you. It’s a pleasure to be here.
MG: Very excited to have you. To get started, would you mind sharing a little bit about your background and your role at Guidewire and how you came to be in the position?
DG: Sure. So I’ve been working in the P N C insurance and technology industry for a little over 25 years now, and I’ve gained really broad experience from serving in numerous roles for different p and c insurance focused technology companies over the course of that 25 years. So I started out in the late nineties in delivery services. I worked on an onsite implementation project as the project manager for two years for our personal lines and commercial lines implementation project in New York City and really got a lot of experience through that and working in all areas across the insurance organization through that implementation project and got a lot of insight to the various different areas that all come together in order to make it happen. After that project was successful, I moved into sales and marketing and that’s where I’ve spent the vast majority of time in my career, just over 15 years.
It’s really given me an opportunity to engage with hundreds of insurance companies across the globe and work with them as they’ve done modernization of their core system environments. They pursue digital transformation projects and now are upgrading to the cloud. I transitioned to my current role in product management at Guidewire seven years ago. I’ve worked on various development projects since then including large complex commercial lines initiatives, as well as some key outbound product management initiatives. And my current focus, which has been that case for about the past three years, is within the claims domain and I work with our development teams to bring innovation to the claims experience and to drive intelligent claims automation.
MG: Then you are perfect guest for our podcast.
CW: Great fit. What a pro. Going off script a little bit here, what’s the scariest thing you’ve seen in all those years of experience?
DG: Oh, I guess the scariest thing I’ve seen in those years is to be honest with you, it’s really amazing to me the number of projects who’ve struggled or failed implementation projects that we’ve seen our customers deal with. And one of the things that we have great pride in at Guidewire is the success we’ve had with our implementation projects because many of the insurers that we’ve worked with across the globe often don’t have successful projects before they get it right. And I think to me, that is something that when we look at the way that insurers go about are mindful of what they want to achieve, the metrics they’re going to use in order to gain success and how they’re going to iterate on that going forward. So I think there’s been a lot of lessons learned and a lot of opportunity awaits as we take those lessons into the future.
CW: Nice. Speaking of the future, you talked about changing your role to product management. What are your day-today responsibilities today in that role?
DG: Yeah, so I do work on the claims product management team at Guidewire. I have a little bit of a specialty role on the team. I’m not working shoulder to shoulder with the other product managers and the developers on the day-to-day basis. I really spend the vast majority of my time working back from customer feedback also with analysts and partners to forge strategic partnerships that bring innovation and intelligent claims automation by leveraging the extensive partner ecosystem that we have. So I work very closely with our solution alliances team at Guidewire and also with our many solution partners as we develop cloud native integrations with our ClaimCenter application. I’ve also started recently exploring strategic partnerships within the policy underwriting and billing domains as well. It’s really an exciting time as we all know. There’s so much going on with the partner ecosystem. It’s an exciting time to work in P N C insurance and technology overall with all the investment that’s been put into the industry in recent years, we’ve seen the rise in InsureTechs even last year in 2022, there was more than $20 billion invested globally in the InsureTech community, which brings loads of innovative ideas and new technologies to our industry.
So that makes it exciting. But there’s also many established players at Guidewire. We often refer to them as mature tech and they’re also making waves with bringing innovative solutions that are designed to drive the digital transformation as well. So orchestrating the connectivity amongst all these solutions across the vast partner ecosystem is really a critical aspect of every insurer’s digital transformation. So it’s exciting for me to get to engage with our partners as we help our customers to continually drive innovation and reinvent the claims experience.
MG: I wonder if those mature techs are teenage years or if they’re a little older than that at this point.
DG: Some are older than Guidewire, so we’ve been around for 20 plus years and some of these companies have been around for much longer with the mature techs. So it’s just a really exciting time to see the evolution of older solutions and then also the innovation that’s being brought in by new players and new interest in the insurance industry. So it’s really great.
MG: And Danielle, that’s what I mean. Obviously coming from the VC space, we’re seeing a ton of, to your point, InsureTechs companies trying to innovate, I’ll call it different components of the insurance value chain. There’s a lot of entrepreneurial activity happening in the claim space. We see a lot of them trying to handle intake a lot on the customer experience side, trying to automate a lot of the first notice of loss and the correspondence that happens, seeing a lot of technology companies that come in trying to help adjusters, things like that. What are in your day-to-day with the companies that you’re seeing, or even from the client side of the vendors that they’re looking to partner with or the solutions they’re looking for, what are the major challenges that you think companies are trying to solve in the claims workflow specifically at this point?
DG: Yeah, that’s a great question. So I would say for starters, most of the companies that we work with and most claims processes, including the claims intake process, historically, they’ve been completely designed around the adjuster and so have the core systems that have supported those processes. It’s always been the experiences centered around the adjuster. So a major challenge that insurers have when they’re looking to reinvent the digital claims experience, they need to look at things from the policy holder’s perspective. They need to look at things from the vendor’s perspective. They need to look at the entire claims lifecycle, the entire claims loss restoration process and really reinvent that and take it away from being just around the lens of the adjuster. Insurers have really been attempting to deliver this customer self-service for claims for quite some time now, and that’s not really that new. But what we have seen and what we’ve seen plateau a lot is some challenges in getting customers to engage digitally, not just at F N O L, but also subsequently in the process.
And that’s, again, they’re challenged because they’re not adopting the technology because it’s not designed from their perspective. So what we see is that insurers are really looking at ways that they can create a distinctive experience that will continuously exceed those customer expectations, even when those customer expectations continue to heighten over time. At this stage of the game, offering a digital customer experience not only during F N O L, but through the whole loss restoration and claim process, it’s quickly becoming table stakes for P N C insurers. They need to evolve, they need to meet the ever evolving demands of their policy holders and also the other involved parties involved in the process. There’s repair specialists, there’s OEMs, many others in the supply chain, and they have to completely reinvent the claims experience, and that’s a challenge for them because it requires examining every single aspect of the claims workflow, every touchpoint, every claim service experience, and that’s a lot to take on.
Another challenge is that insurers have to recognize that when they’re going through this process of creating this optimized claims experience for one customer segment, it isn’t necessarily the same for other segments in their book, for example, if they had a high net worth customer. So how do you anticipate the needs across the different segments? How do you anticipate the unexpressed needs of the customer in the claims journey and truly create a differentiated experience that engages them and has them adopting the digital channels and claims Automation is a huge piece of that. So some insurers that I’ve talked with are further ahead than others. Admittedly, many tier one and tier two insurers that I’ve worked with have created dedicated teams for exploring different claims automation use cases. Some of them have conducted innovation labs with participants that span many IT providers in our industry. So we get to work shoulder to shoulder with the customers as well as the other partners in the ecosystem.
And the general objective of these dedicated teams, these dedicated initiatives, is to really reimagine the claims experience from the policy holder’s perspective while also considering the critical need for connectivity amongst various partner ecosystem solutions to optimize and innovate that claims experience. So it’s bringing together a lot of solutions, orchestrating a lot of data, and that’s very challenging for carriers to do because none of it is easy and many insurers are beyond eager to explore claims automation. They want to leverage predictive models, large language models, machine learning, they want to use open platforms. They of course need the sharing of data, which is critical to maximize the opportunities brought forth by today’s technology landscape and those things that are coming in the future. So claims automation is one of those things that has the ability to address the three key things that claims organizations strive to do well, they want to bring customer satisfaction, they want to do expense management and they want to have accurate indemnity.
Few initiatives can positively influence all three areas, but claims automation is one of them, and in many cases, other initiatives can adversely impact one another. Where they have to make a choice is if I give greater service than there’s more l a e. So we really see claims automation as an opportunity, a critical need brought forth with agility, cloud native integrations. You really need that agility when you’re thinking about invoking on this claims automation journey as well and leveraging flexible partner ecosystems and integration mechanisms because it’s probably, you’re not going to get it right the first time, may or may not get it right the second or third time, and it’s really going to be a never ending evolution when you think about claims automation and how you’re going to want to iterate and continually make changes and these new technologies are available to help you adapt quickly and to be able to really reinvent that claims experience in a very effective way.
CW: That’s helpful. A couple questions. Playing off of all of that, I’m not an insurance guy by training, so what’s L A E
DG: L A E loss adjustment expense? The expense the insurer would incur as the day-to-day loss adjustment process goes on.
CW: Right on. And you mentioned customer satisfaction, which we’ve talked about in a few episodes. I want to connect that with what you said about creating a more policy holder centric experience. What are some of the components of that type of experience that stand out in your mind?
DG: Well, I would say the things that stand out are recognizing that there’s just really not a one size fits all when it comes to serving your customers and giving that optimized experience. You really need to look at your brands, your customer segments, your value prop, and being able to deliver things that are aligned and differentiated for your specific experience. So I would say there’s really a need to look at your different customer segments differently, look at their needs. I think often it’s easy for us in the industry to think of things from our perspective and not from necessarily the policy holder or the customer’s perspective. And are we looking at achieving automation because that’s what the insurance company wants to achieve because of the reduction in cost or what does the customer really want? Not everybody is a full target for full claims automation. Not everybody wants to engage fully digitally, so you have to really look at your customer base, you have to segment them, look at their needs and desires, see how that changes over time and be willing to meet them along their way, along their journey as well. So omnichannel is a huge thing. You still need to be able to have your customer service reps and your adjusters as much as you’re optimizing that digital experience for the policy holders so that when they want to drop out and they want to talk to someone and they want to engage in a different way, that you have the ability to do that without having to revisit any of the information that’s been shared so far.
CW: That’s great. That’s very helpful.
MG: I think it’s really interesting, Danielle, that you talked about that a lot of the solutions initially were very adjuster centric. And I think on the flip side of that, not now, I call this probably what we’re in the second, maybe third wave of insurtech solutions coming about, but the first wave was very customer centric. It was a lot of entrepreneurs saying, this is my experience with insurance carriers and this is the experience I want to fix. And so there’s a lot of those customer experience related solutions. Some of the big names that I won’t mention of changing the whole policy buying experience, the claims payout experience, but then not understanding the nuance that you’re talking about in that for personal insurance, that might all work, but on the commercial side, there’s a lot more factors that go into play. I see there’s regulatory landscape that we can touch on too about how communications are done and the different elements that have to be submitted during a claim, et cetera. And so I think it’s just really interesting that you’re saying that the carriers have had to switch how they think about who’s the main focus of their claims innovation, because I think entrepreneurs now are doing that as well. They’re saying, okay, there’s internal either legacy or technology that needs to be thought of when we’re trying to innovate these solutions because it’s not a one size fits all, and it’s not just my own personal experience that will dictate how a carrier may change their overall workflows.
CW: It’s a really good, I just
MG: Thought point. Yeah,
CW: Yeah, I was just going to say it’s a really good product challenge, like multi audience, multi demographic, everyone needs insurance, right? So really classic. It’s good stuff. One of the things, automation is a common theme here, Danielle, and a lot of that of course is built on the technologies of the day that ways Have you seen insurers attempt to improve the efficiencies of their claims and intake processes?
DG: Yeah, I would definitely say what we’ve observed is that there’s really a broad spectrum of readiness when it comes to the insurer’s appetites for full claims automation. So this is really an area where I feel like global software and IT providers can really benefit from being able to leverage their experience with their global customer base and their partners to bring together the most innovative ideas from the industry across the world. Because there is that spectrum and there’s some carriers that are a little bit more hungry and eager to pursue claims automation than others. And we’ve had the opportunity to work with many of ’em. Some of the insurers that we talk with, they want to achieve a completely touchless claims experience, especially for certain types of claims like first party only or lower complexity claims. And they really feel that that is something that they want to achieve for something that’s like 75 up to 90% of the claims that they’re handling.
In certain cases they can handle in a completely touchless way, and that’s what they’re aiming to achieve. Some insurers are really leveraging claims automation to create really what they refer to as a balance of task and talent. And they feel that there’s always going to be someone involved in the claims experience, someone to bring the empathy and to deepen the relationship with the customer during their time of need, build that relationship and this appetite on this spectrum that we’re seeing. It really does vary drastically among personal lines and commercial lines, insurers as you already alluded to, as well as by geography. So on one end of the spectrum, we can see across the globe we are working with customers in all regions who really do want to drive that full automation to the extent of offering that truly touchless claims experience. We’ve seen customers in North America, Asia Pacific, European and Nordic regions very eager to engage in our early access programs, and they are very ambitious with regards to the level of claim automation they want to achieve in the next three to five years.
In many cases getting up to 90% of straight through processing for certain types of claims. And then on the other end of the spectrum, we talked to lots of insurers, and this tends to be a lot true on the commercial line side that are a little bit more cautious and somewhat skeptical about how much claims automation can realistically be brought into their organization. Some insurers have mild appetites, more of a wait and see, less aggressive approach with this, but regardless of where they are on the spectrum, every insurer that I’ve spoken with sees claims automation as something that they plan to pursue in the next three to five years. Some are further ahead, some are already underway, but it’s something that’s on every single person’s radar.
CW: Can I break in there? How much of an existential threat is that wait and see attitude? Is there real risk of being left behind completely?
DG: I do think it depends on where you are on the market, both from a personal lines and commercial lines perspective, and also based on geography. Certain geographies of the world are much further ahead with digitalization of processes across many verticals, not just the insurance vertical, certainly something we see in the Nordics. So the expectations are so high and it is an existential threat. If they don’t achieve this automation and deliver on those needs and have the straight through processing and really be able to meet those customer expectations, they will lose their customers and they will not be able to remain competitive in the industry. And I think we’re going to see more and more of that on the personal line side of the house than with this existential threat with personal lines carriers because there is a little bit more of a simplicity and a little bit more of a higher expectation in the personal lines market.
We often also tend to see not just with regards to claims automation, not just with regards to inflation or anything else, but really personal auto tends to be sort of the tip of the spear when we see the impacts and the adoption and the way that carriers are looking to adopt technology. And then other lines of business kind of fall behind that and with commercial lines following behind personal lines. So I think it’s less of a threat on the commercial line space because they really have the opportunity to look at leveraging these technologies in different ways and achieving different things inside of their organization versus necessarily direct to consumer. When I say that, I’m talking more about mid-market and up with large commercial. The small business market tends to operate very much like the personalized side of the house where the expectations are rising, and you will not be able to compete if you do not have an optimized digitized claims experience for your policy holders in the next three to five years.
CW: I thank you for that answer and I apologize for using a five syllable term to ask the question That was not a good health
DG: Benefit. I should practice saying that existentialism. See, I can say it. Yeah,
MG:Danielle, I want to pull on that thread. A little bit of carriers are at different phases of their digitalization or transformative journey. And so as a result of that, they’re either ready for different types of solutions at any given time or potentially how they implement the same solution would vary just based on where they are on that trajectory, right, on that path even so more if it’s dependent on the line of business that they’re applying that technology to. So we’ve talked a lot about you don’t have to automate a process end to end initially. You can do it incrementally and find small wins as you go with the companies that you work with. What are you seeing as how do they measure success? What are some of the differences maybe on how they measure success or what are the different KPIs or things that an insurer may be looking for when they’re starting a partnership with a new technology or a new solution?
DG: Yeah, absolutely. So I would say not surprisingly, the most common thing we hear from our customers is wanting to track customer satisfaction and N P S scores as being the most important K P I that they use to measure success of their new technology investments. They’re constantly keeping a needle on where they are with their customer satisfaction scores and of course wanting to achieve higher and higher scores from quarter to quarter. Another key thing in addition to that, in addition to the N P S scores would be customer retention rates. One of the key reasons that insurers are investing in these new technologies and really seeing claims as an opportunity to improve customer service is to improve those customer retention rates. Recognizing that a poor claims experience is one of the key drivers of churn and why your customers leave you, especially at policy renewal.
So there’s really an opportunity there to look at those retention rates and determine how you can drive more loyalty and more customer retention by providing an optimized claims experience. And one of the things I think is really interesting about this is that we’re not only seeing that insurers want to do this with their own policy holders, they want to recruit third party claimants potentially. Now, initially they’re looking at first party claims and how can we make this best for the policy holder? But they’re also thinking of extending this to third party claimants because it’s an opportunity for them to win new customers. If they can provide this optimized, very proactive claims experience to someone who’s not already their customer, it could result in them bringing on new business from that customer. So it’s just really an interesting opportunity to think about how insurers are looking at claims investments in order to drive renewal retention rates and profit on the underwriting and policy side of the house.
CW: This strikes me, sorry. I was going to say, it strikes me as an incredibly difficult, I’m going to go nerd for a minute, really difficult data problem in that unlike customer satisfaction with an e-commerce platform, you’re not having a claim an insurance claim every week ideally, whereas you may be returning a package every week and your life situation may change dramatically in the 10 years between when you have your first claim and your second. So how do organizations cope with that? That seems really hard.
DG: Yeah, this is something we hear consistently from our customers is like in best case scenario, the customer never has a claims experience to deal with. And that would be, and when they do it typically isn’t very frequent. So one of the things that I’ve seen some of our more proactive customers who are looking at this from the policy holder’s perspective, they’re really taking a look at ways that they can meet those customer needs and really be proactive with them through the claims experience and do a little bit more handholding because they recognize it’s even the way that claims adjusters typically speak, the insurance terminologies, all of these things when you think about having a customer self-service experience and optimizing their experience is talking to them in regular language, being able to give them status updates that make sense to them, not creating confusion through the process as well, and being able to leverage technologies.
And again, giving the customer the ability to engage with them through various different channels is a very important part of this as well. But you’re right. I mean, one of the things that I’ve heard a lot of customers wanting to do is that even after digital first notice of loss, they want to integrate with a third party solution that kind of creates a personalized little video for the customer to help them understand what happens next and what to expect based on what happened in their claim. And it’s a really interesting way of engaging them and making sure that they feel supported through the process and really recognizing that it is typically uncommon ground for a person to go through the claims experience and doing everything that they can to help ’em understand what the status is currently, and then using technology to help walk them through what to expect next and to meet those higher expectations.
CW: That’s great. It reminds me of there are these luxury car services like Carvana, which also probably very rare, but not that I’ve ever bought a car on Carvana, but I like to dream and the white glove like, here, I’m helping you through this unfamiliar process. Interesting parallels there. I think
DG: Absolutely because what customers are coming to expect in other verticals and other areas, and they look at insurers and they wonder, why is this experience so archaic? Why is it so challenging for you to leverage technology the way that everybody else does to help make my life a little bit better when I’m going through a loss experience? So I think there’s definitely huge opportunity there, and I think that’s one of the things that makes it so exciting with all of the investment that’s been put into p and c insurance technology in the last five to 10 years is that we really can leverage the technology to help these customers in their time of need and also to interact with them in a way that is not confusing for them and actually is helpful.
CW: Yeah,
MG: That’s an interesting point too now, because as the consumer, right, you say, why isn’t this simple? Why can’t I just get this information? Or why can’t you just do this for me? I think what being in the insurance space or having worked in the insurance industry and then now investing in the insurance space is there are technology and data has never been an issue in the insurance sector. It’s always been there. It takes a while for new technologies to completely take effect because there are so many areas in which an insurer is collecting data, there are different systems in play. There’s all that kind of legacy that needs to be replaced or worked with if there’s a new technology that’s being implemented or new data that’s being pulled in to be used for any part of the value chain. And so I’ve never seen an implementation go a hundred percent smoothly. There’s always challenges. There’s always a lot of testing and alterations that are made to what wasn’t initially thought to be the workflow versus what it ends up being. So I know I have a list from what my experiences are, but specifically on the claim side, what do you see a lot of the challenges that carriers have when implementing new technologies, whether it’s a rip and replace kind of scenario or where they’re trying to bake in new vendor solutions to fit into their new platform?
DG: Yeah, I think you already touched on it with the data. I mean, I think a prominent challenge that insurers are facing with this, with new technologies, with automation, machine learning, ai, all of this coming into play, the prominent challenge is the amount of data that’s needed to truly do this and to do this, right? Because if you think about it, when you’re trying to achieve this claims automation, you’re trying to leverage these new technologies, you’re really attempting to make many of the decisions that are historically made by an adjuster or even appraiser, and you’re automating them. And that’s like an infinite set of decisions as each claim is different. And that’s a lot of decision points through the way and a lot of things to get right with automation. It requires a massive sourcing of data, storing the data, having the competency as an organization to apply AI and make data-driven decisions accurately.
And to do that all at scale. This is very challenging for insurers, but the good news is, is that there’s lots of providers who are bringing new solutions to the table that are offering to solve these challenges, solve these problems for insurers, but there is always going to be a need for the insurer to keep a close eye on the data and making sure that they’re getting the most out of the data that they have and using that and using the new technologies going forward. In addition to that, I would say another key obstacle for insurers is change management. And this is nothing new. I mean, this is something insurers have dealt with as they’ve been implementing technology over the past several decades, the theme, and they know that, yeah, new technology, it entails shifts and workflows, roles and responsibilities for the employees. You have to ensure that the teams are adequately trained, comfortable using new tools.
You want to minimize resistance to change and maximize the adoption rates of your new users. So this extends not just only with the frontline employees, but it also extends to leadership. You need to convince stakeholders the benefits and obtain buy-in. And that can be a time consuming and delicate process. This is a lot of change to invoke, and insurers by nature are risk adverse. So they are typically skeptical and they often share with me that just rep technology around every problem. It’s about the people too. And you got to have, as much as you invest in your technology, you need to invest in your people and you need to invest in that change management because without the adoption rate from your employees and others that you’re wanting to take on the new changes, those initiatives will fail. So the balance of technology and also the talent is really important.
And then another key benefit, I think too, especially when we think about the massive size of insurance companies, and yeah, there’s many tiers, but all insurance carriers deal with scalability challenges depending on their size and that sort of thing. So I think another challenge that insurers really are facing is the scalability new solutions as the technology advances. Because implementing a solution that works well on a small scale but cannot handle increased demands that lead to performance issues and hinder growth going forward, that’s going to create a problem. So it’s crucial to really evaluate these new technology solutions not only for their immediate benefits, not only for their current needs, but also look for their ability, accommodate your future expansion and what you need to scale the organization in the future.
CW: That’s good insight. I want to piggyback on that by asking a question about something that doesn’t scale well right now, which is generative ai. The buzzword, and you sort of alluded to this earlier, I have been talking to folks in various verticals, including a lot of insurance companies lately, and they’re very gen, AI curious, I would say, and they have lots of questions about what it can and can’t do, should, shouldn’t do. And I always ask them, what’s your policy for using gen ai? Can you use Azure open ai? Can you use Claude through a w s? And I get answers that range from definitely not to shrug. We haven’t figured it out yet. So I am really curious with your broad industry insights, what you’re seeing in the space.
DG: Yeah, so you may have noticed that throughout the discussion today, I’ve really referred a lot to more of the predictive models, large language models, machine learning. These are the things that we are seeing in play today with insurers and being able to really tap into that. But from a Guidewire perspective, we tend to stay away from labeling everything as being ai. And because we recognize that there’s some really incredible things about AI that are going to transform the world as we know it, especially with the rise of chat G P T and others and the generative AI that’s, you can’t really watch, read, or scroll or see anything without hearing about generative ai. So I think it’s something that is absolutely going to transform the industry over the course of the next three to five years. Again, many insurers are dipping their toe into machine learning predictive models, but before getting really into the generative AI level of this, we really see something that’s very new for a lot of insurers.
There’s a lot of curiosity around what it will do. There’s a lot of skepticism about what it can and can’t do. So I think it’s something that’s really going to be transformative for the insurance industry going forward in a few different ways. And then I’ll also touch on how some ways where I think maybe it won’t be transformative, and that will lead talking about the compliance regulation and what some of the regulators have to say about all this. So I really feel that it’s going to be a major disruptor in the industry in the coming years. Insurers are still trying to figure out, they’re investing, they’re researching, they’re trying to figure out how to bring that in. How is this going to revolutionize the industry? What profound ways and what new opportunities does it present? The three key areas that we think it will help, generative AI as it evolves, will help insurers are really first to mitigate and assess risk.
Pretty obvious to be able to leverage that more on the underwriting side of the house. You can use AI to analyze vast amounts of data to pick up on trends, opportunities, predict outcomes, help with pricing negotiation scenarios and so forth. So the underwriting teams can absolutely benefit from this. And the organization teams team can also leverage the AI to analyze claims data to look at suspicious patterns, potentially identify potential fraud patterns and other areas of leakage and proactively look to prevent and mitigate risk. There’s also lots of areas with iot that are helping people be more proactive with avoiding and mitigating claims and risk in the first place. So I think that’s one key area that we’ll see generative AI make a difference is in mitigating and assessing and pricing of risk. And then tying it in. The second key area is really around automation of processes, which is what we’ve been talking about a lot today.
Many of our customers already want to embed AI and predictive models into the claims workflows, leveraging R P A applications business rules. They want to be able to capture data from multiple resources, unstructured documents, emails. They want to decipher all of this information and be able to bring that in to help automate and drive intelligent automation, both on the underwriting side of the house as well as the claims side of the house. So this type of automation is going to help insurers to increase accuracy, reduce costs, and it will free up the teams to be able to focus on more valuable work. So that’s a great advantage about how generative AI will be used. And then I think also, again, as we’ve been talking about today, how can we leverage generative AI to augment the customer experience as well as the employee experience? So you can use chat, G P T and others to create visual assistance chat bots.
It can assist customers with commonly ask questions. It can ask them, give them information about their policy coverage, their premiums, their deductibles. It can give ’em claim status updates. It can even assist with more complex tasks such as filing claims or adding and updating drivers or cars on policies. And the best thing is we think about using AI in this way is that it can do this 24 7. So it saves your customers time, helps you reduce workload on your employees, and can help you enhance the entire customer experience. So I think those are the three key areas. Now I mentioned that I would touch on where may it not, and I think this is another area where I’ve historically had many conversations with our customers, our partners and our analyst community about the number one thing that stifles innovation in the insurance industry is regulation.
And there’s, there’s a lot of eyes on this, and especially in an industry that’s as highly regulated as the insurance industry, some regulators that they want to see consistency. They’re not used to trusting a black box that’s going to make a decision. They really want to understand how decisions were made, and they want audit trails, and they want to be able to regulate that across all lines of business, across all geographies. And I think that is where we will see where will the industry not be able to fully embrace the power of generative AI because of the regulatory nature, because of the need for compliance, because of the need of visibility into what is making these decisions that will impact our industry in ways that it doesn’t impact others. That
CW: Makes a ton of sense.
MG: Yeah, I think the conversation that we’ve had with folks in the industry and even with some of the companies that are trying to leverage AI as part of their tech stack and their solution is that in the past, there have been even, especially as it relates to claims, some technology solutions that have been a technology solution looking for a problem to solve. Whereas I think AI is a technology solution that can make current workflow, they can improve current workflows in a way that people have been excited, are excited to explore. And so you’re not going to get that resistance in the sense of AI will make me more or less efficient or won’t work for me. It’s a matter I think of identifying what is the workflow that you’re trying to achieve, and then where does AI improve added efficiency or where does it provide more insights or where does it automate something that I can now take my claims adjuster and put them onto something, I don’t want to say more meaningful, but more challenging or a different work stream because there’s a technology that’s improved the underlying super manual effort as part of that workflow or something else.
So I think what we’re seeing is there’s a lot of companies out there bringing AI capabilities to carriers, and it’s a matter of not finding one that’ll work. It’s finding when that’ll work for what area of the workflow you want to improve.
CW: Yeah, it’s not a panacea, right?
MG: Yeah.
DG: And honestly, yeah, I agree with everything you just said, and I think it’s also important to recognize this kind of takes us back to thinking about the KPIs that we were talking about earlier when you’re looking at claims automation. Because claims automation encompasses many things. It encompasses the digital experience, it encompasses the partner ecosystem and the solutions you can bring in the data. It encompasses all areas here. So when you think about this, you want to look at the KPIs so that you can determine where your automation needs are performing and how that’s better than what you’re getting with traditional claims. So I think it’s really important for customers to have the benchmarking tools to be able to identify the areas where they think they’re going to benefit the most from claims automation and from leveraging embedded ai. And I think it’s also for them to be able to monitor that progress over time, see where they thought embedding a model here would perform a certain way.
Did it align with my expectations, did it not? How can I have the agility in my platform to be able to fine tune what I’m doing with the automation and the AI to continuously iterate and to optimize the experience? And so I think that’s a key thing to think about when you’re looking at these technology investments, is being able to have those measurements in place, the benchmarking in place, and a lot of customers that we work with, they use those KPIs not just to measure the success of the project after the thought, after the fact. They use those KPIs and things to determine where to go after, where are they going get the biggest bang for their buck in automation to begin with. So prior to even, and as they prioritize their technology investments, they can go through and they will look at current cycle times claim costs, leakage across all lost costs for a particular product, for a particular line of business. Where’s the greatest opportunity to reduce cycle times and claim costs? They use those metrics to prioritize the actual use cases that they do in their projects, and then they use the same metrics to measure the success of those. And then to reiterate on that over time. So again, I really think having the benchmarking tools and the KPIs and the metrics in place is something that’s even more necessary in this world of claims automation than what we saw in the traditional claims process.
CW: Danielle, you just did an awesome job of tying a big bow around the entire conversation. So with that, I’m going to call this another episode of Unstructured Unlocked. Our guest today has been Danielle Groves, who is the director of Strategic Development Programs at Guidewire. Danielle, I’ve learned a lot. Thank you.
DG: Great. What’s great being with you guys.
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