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We Are Leveraging AI And ML In Solving Identification And Prevention Of Fraud: Girish Nayak, ICICI Lombard General Insurance

In an interview with BW Businessworld, Girish Nayak, Chief- Service, Operations and Technology, ICICI Lombard General Insurance Company, spoke about general insurance industry, products and more

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General Insurance is an industry that is known to be quite commoditized, and this is something that is only increasing by the day. Motor, especially, is mostly viewed as an “annual tick mark” activity and no more. How do you differentiate your offering on products like motor insurance, expect on price?
Interestingly, the insurance industry continues to see new and rapidly evolving consumer expectations and behaviours emerging. This is primarily driven by an increased internet user base driven by smartphone penetration within the country. This has also led to a fundamental shift in the way we serve our customers. On the other hand, we are also seeing a variety of emerging technologies and innovative business models that have the potential to transform the insurance business. At ICICI Lombard, we have always been at the forefront of using these new technologies that help us in acquiring, retaining or servicing our customers better. 

Specifically, on the motor insurance front, innovative segmentation models based on a combination of internal and external data continue to spruce up. Usage-based insurance basis the customer’s driving behaviour & usage is something that we offer our customers and continues to be tested. Similarly, our AI-based break-in for renewal is a completely differentiated service offering for the customer. As we speak, we continue to build on similar offerings for customers at the time of processing of motor claims. We pride ourselves on our ability to settle claims faster and more accurately. All this together is a compelling offer for the motor insurance customer at the time of purchasing their insurance policy every year.

Tell us a bit about your AI-based break in inspection service. Has it translated into tangible improvements in your top line over the past year?
Our AI-based break-in inspection service has been live since December 2018. It has resulted in an improved renewal process for customers that have had a break in their motor policy. Previously as a part of the process, when a motor policy came for renewal past its due date, a surveyor came and checked the vehicle for any damages. With the new AI-enabled break-in process, the vehicle owner takes a few photographs on the app, post which the AI algorithm checks for any damages. In case the vehicle has dents, spots, any kind of damage – then the AI engine decides, based on the photographs whether the policy is eligible for renewal or not. Currently, almost 60% of motor policy renewals, that are past their due date and require an inspection, are processed through this AI engine. When done manually the process used to take about 72 hours depending on the availability of the customer. Now, this happens almost instantly and at the time the customer chooses. The surveyor visits the place personally if the motor renewal case isn’t qualified to be handled by AI. 

How does ICICI Lombard use AI and ML to identify fraud? Have your recent initiatives in this regard resulted in measurable decreases in fraud?
At ICICI Lombard, we are leveraging the power of AI and ML in solving different business problems, one of them being identification and prevention of fraud. Earlier, we would flag-off claims that needed further scrutiny basis rules and triggers put in the system. This would be investigated thoroughly and marked as fraudulent or not basis the investigation. Today, with significant data availability and technologies available to process big data, we have started using AI/ML based fraud detection models to predict and highlight probable fraudulent claims. All this happens immediately once the claim is intimated and logged within the system. The continuous self-learning approach of these algorithms helps us to implement solutions that auto-correct very quickly; reducing the time for learning and execution. These algorithms are helping us in identifying and prevent frauds faster (e.g. at the time of claim intimation) and also increasing our efficiency in fraud identification. This should help us in fraud reduction in the years to come.

How do you see the entry of agile, well-funded digital players like ACKO and Digit challenging the status quo? Is it not true that they have a distinct edge in terms of pricing, as they are direct to the customer?
Every insurance organization needs to adapt to their customer’s needs and preferences, irrespective of whether it’s new or old. With the rapidly changing consumer expectations and behaviour, it is even more imperative for every insurance organization to be able to reinvent itself to adapt to these changes. Technology plays and will continue to play a vital role in developing solutions using new-age technologies such as AI and ML to help fulfil these expectations. Increasing competition always leads to superior customer service and is always more beneficial to the customer. 

While digital natives look to making insurance less cumbersome and user-friendly, our journey on this had begun long before these organizations came in. In fact we were the first insurance organization to offer general insurance products online. Similarly, some of the things that we have done to cater to our digital consumers, include, providing sachet based products on platforms like Paytm, running a cashless based OPD program with Practo. As a strategy, we have been running a business within a business (our digital business) which is helping us in increasing collaboration and innovation in the digital space. Similarly, our adoption of agile methodology for executing projects is reaping rich dividends in the speed at which we execute projects, e.g. getting systems and processes up and running for long-term private car and two-wheeler last year. On the pricing front, our strategy of focusing on long-term profitable growth segments defines our pricing and segmentation strategy.

Tell us about some of your CRM initiatives that have worked. What measures have you taken of late to improve the experience of your existing customers? And what about prospective customers who are looking to apply directly to ICICI Lombard for a policy… what improvements have you made there?
At ICICI Lombard, we have always been at the forefront of using new technologies that help us in acquiring, retaining or servicing our customers better. With ever-increasing customer expectations, customer centricity has become more important than ever. Moreover, you no longer have years of time to experiment and get your model right in this VUCA world – either you adapt or you perish. We continue to design new insurance products and distribution partnerships which can suit the lifestyle of today’s generation and fit in seamlessly. So, we continue to move in the direction of helping the customers to buy an insurance policy as seamlessly as possible and in settling claims for such policies in near real-time. We are actively looking to design new insurance products and distribution partnerships which can suit the lifestyle of today’s generation and fit in seamlessly.

Lastly, do tell us about some challenges that you feel need to be addressed at the regulatory level.
Given today’s rapid pace of change, it is critical to bring in innovation and fresh ideas from as many sources, from inside and outside of the industry, and curtail the time to market. The regulatory sandbox model is a welcome change to address these challenges. The regulatory sandbox would hopefully support innovators by providing a regulatory environment that is conducive to experimentation, use of innovative technologies, and improving access to supervisory authorities. The sandbox could enable safe experimentation with new products and methods such as pay as you go model, peer to peer distribution, new sachet products etc. It’s still very early days, but we are hopeful that we will be able to experiment with new products and service offerings that will ultimately benefit the customer in the long run.


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Girish Nayak ICICI Lombard General Insurance