The insurance companies of Bangladesh should start their Artificial Intelligence (AI)-empowered journey as the 4th Industrial Revolution (4IR) is knocking at the door.
The companies should embrace the drive as a way to continuously improve their abilities in terms of digital marketing and the machine learning process.
The observations came up at a dialogue, styled 'Artificial Intelligence in the insurance industry: making a quantum lead', organised by the Bangladesh Insurance Academy (BIA) on Thursday last.
Additional Secretary of the Financial Institutions Division Abdullah Harun Pasha joined the dialogue as the chief guest, with SM Ibrahim Hossain, director (acting) of the BIA, in the chair.
Dr Nurur Rahman, a US-based data scientist, presented a keynote paper in the dialogue held on a virtual platform, moderated by Dr Md Sohrab Uddin, former chairman of the Jiban Bima Corporation.
While presenting the keynote speech, Dr Rahman said that AI-empowered tools are very much important across the globe to explore opportunities.
He said the insurance regulator is set to introduce the bancassurance system in Bangladesh, a partnership business model with the banks, where the AI tool can be used efficiently to identify potential customers.
"Suppose, a bank has 100 clients and among the clients' potentials insurance customers can be identified by using machine learning process," he said.
Mr Rahman, who is also a founder of an AI-based startup 'Somikoron', said the demand side is ready here but the supply side remains very much weak.
"Failure to embrace AI technology early would be a missed opportunity rendering the insurers only vulnerable to the disruptions," he noted.
Bangladesh has a growing middle-class population because of its strong economy; an increasing fraction of the population with higher purchasing capacity provides an unprecedented opportunity for business growth, he observed.
"Despite this, the negative growth rate of the insurance industry indicates a collective disappointment in widening its customer base. To get out of this unwelcoming situation, insurers must take active measures to reach out to the masses with improved products and affordable services."
The widespread success of AI-enabled technologies all over the world shows that automation as well as product and market diversification through AI adaptation is the way to go for the incumbents, as per the keynote paper.
The digital platform is an indispensable medium to reach out to the masses; however, local firms conduct product marketing in a very informal manner, the paper reads.
The paper said insurance agents and field representatives typically make use of unreliable and un-scalable methods to find new customers.
Firms can leverage existing customer databases and combine that with external data, such as bank or retail transaction data, to develop a 'customer look-alike model' to optimise the lead or target generation processes.
Robust AI algorithms, including cluster techniques or machine learning predictive models, can be used to augment the identification of target audiences across all product lines, according to the paper.
The data-driven automated target generation process has the promise to add the highest value to agents and representatives and boost their performance in prospect identification and lead generation.
Bancassurance is a promising channel for selling insurance products through banks.
However, the key factor that allows banks to reach the "right" customers at the "right" moments with the "right" insurance offers is to have an exceptional ability in prospect discovery, said the keynote paper.
It also adds that the realisation of the bank-insurer collaboration, therefore, hinges upon a successful adoption of digitalisation and AI-inspired advanced technologies.
Bangladesh now has 81 life and non-life insurance firms. But the insurance penetration in terms of the GDP remained less than 0.5 per cent.
