IAG will ramp up investment in artificial intelligence and innovation in the 2020 financial year as it races to meet changing customer needs, the multinational insurance company stated today in its 2019 annual results.
The commitment comes after a number of successful AI efforts by its Customer Labs over the last three years which have “encouraged IAG to accelerate its spend” the company said today.
Among them are a real-time customer insights portal and a voice-activated AI capability for staff to interact with it; an analytics-driven pricing capability across its car insurance brands; and the use of neural networks to present the most relevant advertising to customers on social media channels.
Late last year the insurer co-founded an ethical AI institute with Data61 and the University of Sydney.
Offering a better customer experience is the main driver for the firm’s AI focus. IAG said it will continue with this strategic priorities to “better connect customers and automate processes” and “embed cognitive capabilities and artificial intelligence that anticipate customers’ needs”. Data driven decision-making will allow IAG to “better understand” customers.
The technologies don’t come cheap however, with IAG prepared to take an increased loss of up to $50 million on AI and innovation in the coming financial year.
Bringing the insurer’s claims systems onto a single platform (GuideWire’s ClaimCenter) is now “largely compete” and bringing benefits to staff and customers, said IAG CEO Peter Harmer today.
“Our simplification program is well-advanced, enabling us to increase our focus on customer engagement and growth,” he said.
“We’ve consolidated our claims platforms…which makes it easier for our people to process claims and means we can quickly divert employees from one part of our business to another to help our customers get back on their feet more quickly,” Harmer added.
The coming financial year will see the now redundant claims systems fully decommissioned, and consolidation efforts put to the company’s policy administration systems.
All customer data is being brought onto a single data platform, the company explained, to give IAG an “increasingly detailed picture” of consumers and how best to serve them.
Sitting behind the AI and consolidation work is greater use of public cloud within IAG.
The company will be accelerating its take up of public cloud “to more fully access its benefits” and enable “more rapid, efficient and flexible” decision making around customers, the company said.
During the second half of the 2019 financial year a “second material workload” was moved to the cloud, with accelerated migrations coming later this year.
Staff are also being upskilled on cloud environments and how to use them, with Customer Labs and IAG’s Group Technology team recently establishing a Cloud Academy that provides “practical guidance on how to make the most” of the technology.
Investments in external start-ups will also continue, with $19 million of $75 million Firemark Ventures fund, launched in 2016 now in play. Products have been developed with two of the companies IAG has invested in, Airtasker and UpGuard.
In the second half of the 2019 financial year more than 150 start-ups were assessed, four in particular detail. Areas of interest for IAG are computer vision, voice analytics, location data, aerial imagery and drone technologies. A “strong opportunity pipeline” is in place for the 2020 financial year IAG said.
The company enjoyed a 16 per cent increase of net profit after tax in the 2019 financial year compared to the previous period, up to $1,076 million. This figure was helped by a $200 million profit made on the sale of IAG’s Thailand operations.
Gross written premiums were up 3.1 per cent, underlying insurance margins also increased although were outweighed by higher costs from natural disasters in the period.