Month: May 2018

53% of Insurers Are Opting to Develop AI Capabilities In-house— Everest Group | Press Release

May 8, 2018

A high skills gap in AI expertise is impeding adoption and acceleration of AI initiatives and compelling insurers to consider creative tech partnerships

As leading insurers transition toward becoming technology-focused firms, they are encountering a high skills gap in the area of Artificial Intelligence (AI), a significant barrier to their efforts to scale pilot projects and realize the expected value from AI initiatives. Everest Group reports that the majority (53 percent) of insurers are opting to build in-house AI capabilities through hiring, internal training, hackathons, acquisitions and InsurTech partnerships.

Conversely, 47 percent of insurers are turning to IT service providers to address the skills gap and accelerate time to market. Many of these service providers bring AI implementation expertise not only from their work with other insurers but also from their work in other industries that are further ahead on the AI adoption curve. Service providers such as Capgemini, Cognizant, HCL, IBM, Infosys, LTI, TCS and Wipro are building insurance domain-wrappers on top of their existing AI platforms to demonstrate early Proof of Value (POV) and accelerate the time to market for their clients.

“Global insurance executives correctly believe that adopting AI can catalyze the transformation of their business models and help their companies stay competitive in the market,” said Ronak Doshi, practice director with the IT Services research practice at Everest Group. “However, among all technologies being adopted by insurers, the skills gap is the highest for IoT and cognitive and AI-based technologies. So, insurers are exploring creative ways to address the skills gap, not the least of which is partnerships with InsurTechs and service providers who can bring AI expertise to the table.”

Everest Group studied 80 distinct AI-focused investments by global 100 insurers and recently released its findings in the report, “Artificial Intelligence (AI) in Insurance Moving From Pilots to Programs: Insurance IT Services Annual Report 2018.” In this report, Everest Group explores the adoption penetration of AI across the insurance value chain and provides snapshots of nearly 20 successful applications of AI by leading insurers.

***Download a Complimentary Abstract of the Report***

The key business objectives and leading use cases for AI in the insurance industry fall into these three categories:

  • Customer Experience (58 percent). Improving front-end customer experience remains the top priority and accounts for 58 percent of all the analyzed use cases. Insurers are trying to provide personalized and instant services to customers using chatbots and mobile applications. Leading use cases include validating insurance cases against business rules and using speech analytics solutions for sales and operational efficiency.
  • Process Improvement (43 percent): AI is helping insurers optimize processes, both internally and externally. Claims management remains a priority for the insurer, helping customers to fast-track their claims process and reduce the time taken for payments. Insurers are also using AI to improve efficiency in documentation and call center operations. Leading use cases include mobile applications and web portals to answer customer queries and give policyholders one-stop access to their documents.
  • Product Innovation (19 percent): Leveraging AI for product innovation is in the nascent stage of development. Insurers are using IoT devices such as those for telematics, connected homes and connected self, to develop more usage-based insurance products for customers. Leading use cases include leveraging data from connected vehicles and using AI-powered wearable devices and mobile applications to help customers with personalized advice.

The CX in CCO has Evolved – How are Pinnacle Enterprises™ Doing it? | Sherpas in Blue Shirts

May 7, 2018

There’s no shortage of market discussion around a wide range of customer experience (CX) opportunities and challenges. It’s what everyone in your organization, from IT, to HR, to actual customer care, are talking about. But while ideas about what you should be trying to achieve and why you should care abound, insight on how to actually execute and what delivery outcomes to target is hard to come by.

Use of CCO Services

One approach drawing attention involves the use of contact center outsourcing (CCO) services. The traditional “butts-in-seats” model is evolving to more of a customer experience management (CXM) service model, where outcomes are assessed for impact as much as for cost management. The traditional view has been that the primary value delivered by CCO providers is operational cost savings through efficiencies, labor arbitrage, and scale. But that’s no longer enough. An increasing number of enterprises are raising the bar and looking to their CCO providers for an expanded value proposition targeting digitally-enabled and differentiated CX capabilities. We refer to this engagement approach as Customer Experience Management (CXM) services.

CX Outsourcing Pinnacle EnterprisesTM

We believe that companies really serious about reshaping their brand through memorable CX are more often turning to this new model of CXM services. We call this breed of buyers CX Outsourcing Pinnacle EnterprisesTM. And we believe these enterprises are very intentionally leveraging these advanced CXM services to enhance their corporate-wide CX strategies, and to achieve results more quickly and at lower costs.

We’ve launched a unique study to dig deep and identify how these Pinnacle Enterprises engage CXM services to drive both operational and strategic imperatives for their overall CX strategy. How can this emerging model help enterprises tackle high-value CX objectives such as digital enablement, greater insights on and visibility into consumer wants and behaviors, increased wallet share, and reduced customer effort? What are the mechanisms in play around technology, governance, talent models, pricing models, and others?

This is an all-around different approach to CXM services – a rethinking of which outcomes to target, what to measure, the role of technology, and the new relationship model.

Curious to know what leading CX Outsourcing Pinnacle Enterprises are doing? Want to know where your organization stands compared to others? Everest Group invites you to become part of the research process and take our survey.

Life Sciences Companies, Lagging In Tech Adoption, Can Leap Ahead with a DevOps Approach—Everest Group | Press Release

May 7, 2018

AstraZeneca, MediVector case studies illustrate two of many potential applications of DevOps in pharmaceutical value chain.

The pharmaceutical sector, which typically lags behind other industries in technology adoption, is crying out for change as its IT organization is unable to reform itself fast enough to deal with an increase in drug safety breaches and slow time to market for both products and business solutions. Everest Group maintains that pharmaceutical companies can address these challenges by employing DevOps—a methodology successfully implemented in the software industry to respond to fluctuating demands, provide a better customer experience and reduce time to market.

Potential DevOps use cases abound across the pharmaceutical value chain: drug discovery and research, clinical and pre-clinical trials, manufacturing operations, sales and marketing, and supply chain management and distribution are just a few examples.

As illustration, Everest Group points to two successful DevOps implementations:

  • AstraZeneca achieved improved quality, significantly faster time to value delivery (a 40 to 60 percent improvement) and reduced team sizes, which in turn resulted in a 25 to 40 percent cost reduction.
  • Similarly, MediVector successfully applied a DevOps approach to rectify slow quality assurance audits of the machines used in the drug development process.

Everest Group cautions, however, that although a wide variety of DevOps use cases are feasible, pharmaceutical companies should prioritize their DevOps investments based on potential business impact and ease of implementation.

These findings and more are discussed in a recently published Everest Group report, “Life Sciences Annual Report 2018: Pharma’s DevOps Factor for Digital Transformation.” This report takes a look at the concept of DevOps, puts forward a number of DevOps use cases across the pharmaceutical value chain and evaluates each to decide which is the most suited for implementation if progressive business impact is to be realized. The report also lays out a three-stage future implementation roadmap for pharmaceutical enterprises.

Across many industries, the adoption of DevOps is being linked directly to time to market and customer centricity,” said Abhishek Singh, practice director at Everest Group. “As Astra Zeneca and MediVector cases exemplify, the time seems ripe for pharmaceutical companies to make DevOps their next big bet. Indeed, most pharma firms are currently looking to experiment with DevOps, with a long-term goal of enterprise-wide DevOps-enabled digital transformation.”

Additional Key Findings:

  • Technology aspects, such as automation and cloud computing, coupled with softer aspects, such as a cross-functional organizational structure and an agile working culture, can drive DevOps enablement.
  • The success of DevOps initiatives in modern enterprises hinges on three pillars: a culture of trust, accountability and shared responsibility; standardization of pocketed adoption and consolidation of tools and technologies; and hybridization of the enterprise portfolio across legacy systems and modern DevOps-enabled applications.
  • DevOps adoption is particularly favorable for industries that suffer from frequently changing market demands, high time to market, poor customer experiences and inefficient operations. Conversely, DevOps adoption is unfavorable for industries that are heavily regulated or have mammoth organizational size, a complex stakeholder environment, or a mandate for cost minimization.
  • Service providers can help enterprises in their DevOps journey by devising roadmaps, aiding with change management and providing the necessary technology support.

***Download a complementary report abstract.***

AI projects in Insurance are Moving from Pilots to Business Programs | Sherpas in Blue Shirts

May 4, 2018

Insurers are rethinking their business ethos to become protectors instead of payers. The insurer of the future is aiming to develop a customer-centric value proposition. Carriers are looking at developing innovative products that are contextualized to meet evolving customer needs. And the insurance distribution strategy is shifting to adapt to new product offerings, client needs, and digital technology-led disruption in the ecosystem.

Not surprisingly, insurers are adopting AI and related technologies to drive these capabilities. According to our just released Insurance IT Services – Annual Report, the top three business objectives insurers are trying to achieve with AI projects are customer experience, process optimization, and product innovation.

AI Ins BlogAI Trends in the Insurance Industry

Our annual report studied 80 unique AI initiatives by global insurers to unearth AI trends in the insurance industry. Here are the top ones we identified.

Capabilities

Approximately 53 percent of insurers are developing in-house capabilities for their AI initiatives. But many have large skills gaps that will inhibit their ability to scale pilot projects and realize the expected value from AI initiatives.

Embedded intelligence

Insurers have accelerated their focus on embedding intelligence across the value chain, with higher adoption of AI for sales & distribution and underwriting processes.

Self-service

Insurers are adopting intelligent self-service AI tools to enhance the customer experience.

Mid- and back-office process value

The value delivered through front-office AI initiatives such as chatbots is limited. But real value can be unlocked when AI is applied to optimize mid- and back-office processes such as agent support and claims management.

Data

While structured enterprise data remains the major source of data for insurers (52 percent, per our research), the connected ecosystem – i.e., data from IoT-based devices – is gradually gaining traction, at approximately 35 percent. As insurers evolve in their AI journey, deploying AI and machine learning (ML) to leverage unstructured data from third-party sources and connected ecosystems is likely to increase. But as of today, enterprise data silos, legacy systems, and lack of interoperability standards to tap into the connected ecosystem and third-party data are slowing down insurers’ AI initiatives.

Some Standout Examples

Many insurers have made progress in deploying AI and ML to their data and are starting to see quantifiable results. For example:

  • Zurich Insurance deployed AI in its personal injury claims process. The company claims that AI has helped it save 40,000 work hours, and reduced claim processing time from 58 minutes to five seconds per medical report
  • ICICI Lombard launched a chatbot called MyRA to underwrite two-wheeler, fire, and burglary insurance for SMEs. Since its launch, MyRA has been engaged in 65,000 customer interactions, and has sold more than 750 policies without any human intervention.

AI has the potential to deliver significant value to insurers and their customers. To learn more about how it can impact your business, our recent Insurance IT Services – Annual Report is packed with data and our take-away insights from 80 unique insurance firm AI projects. In it, we outline how AI implementation is impacting the insurance industry, and present various AI use cases across the insurance value chain.

Please write to Ronak and Priyanka to discuss how you’re adopting AI in your insurance business processes.

Q2 2018 Market Vista™ Briefing: Global Services Market Trends – Will the First Quarter Set the Stage?

May 3, 2018

Tuesday, May 22, 2018 | 9 a.m. CDT, 10 a.m. EDT, 3 p.m. BST, 7:30 p.m. IST

Download Presentation Slides and View On-Demand Recording

In this fast-paced 45-minute webinar, Everest Group experts will summarize and explain the most impactful events in the global services industry thus far in 2018 and look forward to how these events will shape the rest of the year. While the first quarter typically sets the stage for the full year, will 2018 be any different? There is recovery in traditional services, whereas some segments continue to stagnate. We’re also seeing preference towards in-house delivery model in many enterprises, with small and mid-sized firms also driving setup activity.

Based on Everest Group’s Market Vista™ research, a quarterly look into the key forces and metrics defining the market, this session will quickly cover:

  • Outsourcing trends: Volume, Deal size, duration, and renewals
  • Market trends in digital adoption: Services, geographies, and service provider categories
  • GIC market trends and analysis: Enterprise segments, functions, and emerging trends
  • Insights into location activity: Offshore and nearshore geographies, functions, and scale

Who should attend?
Executives planning their next global services move and needing to understand the latest key developments across the offshoring and outsourcing market.

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