Insurers will need to take the pain if they are to make the most of AI – Esure

For Peter Martin-Simon, chief customer officer at personal lines insurer Esure, the benefits of the insurance industry utilising artificial intelligence (AI) are “significant” – however, “getting the system and the architecture” that underpins this technology right is “very hard”.

Speaking exclusively to Insurance Times, Martin-Simon emphasises that the foundational building blocks that support AI within insurers’ underwriting operations is crucial – if these are not up to date or sufficient, then the full advantages of AI will not be unlocked.

He explains: “There are a lot of things to think about when it comes to AI. From a customer perspective, the aim is to make the service we provide smarter and seamless.

“For instance, the ability to read and digest complex medical documents and create reports which can allow customers to obtain a quicker response.

“The benefits [of AI] are significant, but getting the system and the architecture right is very hard. Pilots may well be welcomed, but to create a system across [an] organisation is not easy.

“AI has the capability to do things very quickly. But if you have legacy data and some of the plumbing is not right, [AI] also has the capability to make mistakes on a broad level.”

An important reason to get underlying AI systems right is because AI has an important role to play in improving insurance customers’ experiences, Martin-Simon adds, thanks to how the technology can speed up internal processes.

However, the systems underpinning AI usage must be up to scratch otherwise insurers risk denting an already fragile relationship with the general public.

He continues: “We need to deliver customer transparency. We have to explain to clients exactly how AI is helping them. The benefits need to be clear.

“As an industry, we are not synonymous with deep customer trust, so it is important that we can show clients how AI is helping.

“But [leaders] need to transform the business as a whole and that starts with the [underlying] system.”

Practice what you preach

Martin-Simon’s perspective on AI usage was born out of Esure’s own digital transformation journey.

In Q1 2024, the personal lines insurer completed a four-year system re-platforming project – this saw Esure transfer its core data and systems onto a new platform, with its prior legacy model subsequently switched off.

Martin-Simon says: “We now have all our data on a new cloud-based platform. To do so, we had to go through the pain of moving the data and architecture onto a system which allows the use of artificial intelligence.”

The insurer’s personal lines book is split between 75% motor policies and 25% household policies – Martin-Simon explains that 90% of claims and mid-term adjustments can now be carried out digitally with the use of AI.

Other ways Esure is using AI include to support more accurate and optimised pricing in real-time, to scan documents and create abridged reports during the claims process and to identify fraud at both the placement and claims stage.

Martin-Simon continues: “We have been able to get AI to read all incoming chats and divert the enquiry to the right representative in seconds.

“It also means that our representatives have a short report which informs them of the data they need on the enquiry and the client, eliminating the need to read through lengthy and complex correspondence.

“It is [a] clear case of how AI can be used not to replace human interaction, but [to] support their ability to deliver a more efficient response.”

Martin-Simon adds that Esure’s clients have already noticed the difference following the insurer’s re-platforming process, with feedback highlighted rising satisfaction.

He says: “We have surveyed our customers asking them to rate their experience out of five. Over 95% gave us a four or five when it came to ease of use.

“However, for the benefits of AI to be truly realised, you need to have the technology in place.”