AI can ‘turbocharge’ the UK insurance sector – NTT Data

The place of artificial intelligence (AI) in the public and professional consciousness is a strange one. While the technology has been in development via stutters since British mathmetician Alan Turing published a paper entitled Computing Machinery and Intelligence in 1950, it has now seemingly exploded onto the lips of the whole world. 

What makes it strange, however, is that while most recognise AI’s revolutionary potential to upend and improve society, very few yet have the expertise to really implement it effectively. 

This is where NTT Data comes in – the mutlinational Japanese-owned technology firm is now looking to enter the UK insurance market and bring its considerable experience with AI to bear to “turbocharge” the insurance sector. 

The firm is currently the largest provider of services to the Japanese insurance sector, the leading administrator of health insurance policies in the US and boasts a Singapore-based global market-leading insurance middleware platform for the rapid launch of insurance products into digital distribution channels.

Speaking to Insurance Times, David Basson, NTT Data’s business developer and advisor for UK general insurance and broking, explained: ”NTT Data, as an organisation, is one of the largest organisations in the world that isn’t working in one of the largest insurance sectors in the world – which is the UK.

“The focus coming from Japan is now to put the final jewel in the crown.” 

NTT Data’s plan of attack for the UK insurance market involves utilising artificial intelligence technology experience from other industries and geographies to bring its benefits to the UK. 

Ralph Tucker, the firm’s industry development lead for life, pensions and investments with read across into insurance, explained: ”The Japanese approach to personalising products in the insurance industry combined with the innovation that goes hand-in-hand with that is exactly what we think we can bring to the UK.” 

Entry point

As the firm explained, however, its experience in the Japanese market and elsewhere does not translate immediately into the UK market as a “lift and shift” – Japan’s population is much more acclimatised to high tech solutions to everyday problems and is well versed in adoption. 

As an entry point to the UK insurance sector, NTT Data is first looking to improve customer service by wrapping AI around customer service agents to improve services. 

Basson explained: ”The Japanese example gives us a North Star and provides an example of the possibilities, but we need to take a proper view of the UK market and explore how those practices can be adapted locally. 

“In the conversations that we’re having with UK insurers, they agree with us that the best place to start with AI in your business is around Consumer Duty.” 

Consumer Duty is the FCA’s flagship piece of regulation that came into force at the end of last month (31 July 2023). It sets out a raft of new requirements for insurance companies to demonstrate and evidence positive customer outcomes across four metrics – these include products and services, fair price and value, consumer understanding and consumer support.

Basson explained: “What AI technology can do is identify potential vulnerability from a customer’s communications and then automatically inform a contact centre agent or broker that they need to adapt their communication style and use of language.”

Tucker added: ”AI provides the ability to personalise the insurance jargon and output in a way that the recipient of communications will understand – it can summarise the key facts about what customers need to know so that they really understand what it is they’ve bought.” 

The use of AI here is to improve the ability of those working in the insurance industry to perform their job roles effectively by supporting them with the most relevant information quickly.

Basson said that AI technology was analogous to an electric bike in this regard: ”From our perspective, it’s like an electric bike – AI lets you get up the hills faster and makes you go further on the flats. It cuts out the fat of the job, everything that irritates you about a day job and frees you up to focus on the things that really matter.” 

People impact 

While the concerns over a Terminator-style AI takeover of society have become somewhat trite in reporting on the technology, there remain more legitimate concerns over overdoing the implementation of technology in the people-based business of insurance. 

However, Basson believes that AI actually presents an opportunity to present a more human face to customers in times of need.

He explained: ”The bottom line is that, in our industry, emotional things happen and sometimes you want that emotion coming back at you at the end of the phone. If you can prioritise that then it’s a great use case for AI. 

”If a customer is phoning up and saying they’ve been in a really bad car crash and their daughter’s in hospital, AI can identify that and prioritise putting that customer through to an employee with the skills and empathy to walk that customer through the next steps.” 

This is the other aspect of where NTT Data believes that it can support the initial adoption of AI in the UK’s insurance sector – making computerised journeys feel entirely personal.

Tucker said: “This is where AI can make a customer journey feel nothing like a computerised journey – it will feel natural for customers with a human in the loop and feel really, really supportive.” 

And while concerns exist about the ability for AI to improve efficiency and allow companies to cut staff numbers as a result, Basson said he thought this could easily “go to far”. 

”You could get rid of a lot of staff if you really wanted to, but your business might not survive – you can easily go too far,” he added. 

Base camp 

At the moment, various UK insurers have been exploring the use cases of AI but few have come out to plant their flag in the ground and outline a workable use case. 

Basson said he believes that this is to do with concerns over the security of the vast quantities of data needed to effectively implement the technology. 

“That is why many insurers are not touching AI yet. It’s not because they’re afraid of the technology, it’s because they’re afraid of where the data’s going to sit.

“NTT Data has a private AI technology coming out soon, so our recommendation is to get your thinking aligned around what generative AI can do, start identifying the on-ramps and use cases and by the time the corporate versions land you’ll be good to go.” 

As far as the potential for AI to negatively impact current systems goes, Tucker was unconcerned. 

He said: ”The value of AI is that it is the enabled and the turbocharger, the fact is that the engine will still work but will turbocharge.

“What we’re exploring now is just the base camp – we know through our conversations with the leading insurers that they agree with us. Going into AI as a regulatory tool is just the start, the next battlefield will be over price, customer service and empathy with their customers.” 

• NTT Data and Insurance Times will be teaming up to host a roundtable discussion in Central London with the aim of demystifying insurance. The event will take place on 3 October 2023, with Insurance Times coverage to follow.