Eliminating complexity – using AI

The head of Allianz Versicherung wants to restructure the company and simplify the product range. Many companies have not yet recognized the order of the day. Despite the fact that the elimination of complexity is a prerequisite for successful digitalization.

“The main problem in our industry and Allianz in particular is that we are sometimes suffocated by our complexity,” CEO Oliver Bäte declared in front of the International Club of Frankfurt Economic Journalists (ICFW). [1] His company alone has 61 legal protection insurances in IT systems. Twenty of them can at least now be concluded.

With his analysis, the Allianz boss gets to the heart of the striking competitive disadvantage of traditional insurance companies compared to young and hungry companies. There may have indeed been a slight recession in the foundation of startups in the German insurance market, as the ”InsurTech Radar Germany 2019” from Oliver Wyman shows.[2] However, this also shows that the young companies are increasingly turning towards the supply side as well.

An impressive example from this year is surely the location-based short-term insurance from One Insurance. If the customer, for example, enters an airport, their smartphone will inform them that they can take out a short-term travel property insurance. After putting some information in the app, the desired insurance protection is available. Thanks to GPS location tracking, the insurance ends automatically once the insured individual returns home.

Customers expect to save money online

As recently shown by the survey “Digital insurance” [3], more and more consumers can imagine taking out an insurance completely online, even with an app. However, the customers simultaneously expect significant savings compared to classic sales channels and products. It is obvious that a company like Allianz has difficulties when a tariff jungle strains policy management and IT systems.

A simplification of tariffs and the agile development of the product range help create slim IT processes as well as eliminate old burdens in the IT architecture.

Identifying worthwhile models

Systems with artificial intelligence (AI) can provide great help when analyzing customer and contract inventories in order to identify lucrative contracts and policies. On the one hand, a critical review of the IT landscape is needed to use such future-oriented technological approaches. On the other hand, island solutions must be eliminated that unnecessarily increase complexity and drive up cost pressure.

Simplification, usage of standards (for example, BiPRO) and the creation of interfaces should be at the top of the agenda for all IT strategies. It does not make any sense to simply digitalize business processes without tackling this basis.

As our consulting practice shows again and again, artificial intelligence can only provide its great benefits in the insurance industry with the unification and standardization of interfaces. AI does not just support the insurance company with data analyses and customer segmentation, but rather it can also be used reliably for claim processing and fraud detection. AI also helps with risk assessment for life and health insurance or makes consumption-based tariff models even possible in the first place.

Machine learning and pattern recognition can be used to save costs throughout process chains. An example of customer identification: AI-supported image recognition systems are now able to reliably identify a user based on a comparison of their photo identification and a selfie. Compared to a manual inspection in a call center, this is faster, less expensive and meets current customer expectations.

The sooner the insurance companies are willing to eliminate complexity, the faster they will profit from the use of AI. Our consultants experience this every day. We would be happy to show you how your company can obtain concrete benefits by using AI. Contact us!


[1] https://www.wiwo.de/unternehmen/versicherer/allianz-chef-baete-wir-ersticken-an-unserer-komplexitaet/24950486.html

[2] https://www.it-finanzmagazin.de/insurtechs-auf-dem-vormarsch-91653/

[3] https://www.it-finanzmagazin.de/online-versicherungen-guenstiger-schneller-flexibler-88659/


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