Intelligent insurance software

Machine-learning can change everything

The use of software has changed almost every aspect of industry and business, and the insurance sector is no exception. Even in the Bangladesh economy, where it has a modest size of USD 150 billion, there are 31 insurance companies, and all of them are using software to run their business.

The problem is that even though these 31 insurance companies—and experts feel there are too many players in too small a market—are using software, the quality and the efficiency of the software being used needs to be put under the scanner.

While insurance software in many developed countries rely on machine-learning to bag more customers and to draw more companies into the insurance network, insurance companies in Bangladesh still heavily depend on underpaid agents to do that job.

This probably explains why, despite having 31 insurance companies, less than one per cent of the country's population is insured and the sector's contribution to the economy is still below one per cent, say experts.

Experts also say the introduction of intelligent insurance software, which uses machine-learning technology, could vastly increase the coverage, efficiency, and transparency of the insurance sector.

 Software solutions

What does intelligent software mean?

Hasib Muammar Rashid, a software engineer currently working on the development of intelligent software for the insurance sector, says: “To have a clear idea of what insurance software can do, one first needs to understand the function of an actuarial table.”

Actuarial tables form a cornerstone of insurance and are a very basic form of machine-learning. “Take, for instance, mortality tables. These tables produce highly specific and shockingly accurate projections of how long people born within a certain period will live.”

Hasib says these projections do not materialise out of thin air. They are formed and refined by millions of data points and real-life examples fed into the tables and evaluated at an aggregate level.

To put it very simplify, if 1,000 people are recorded to have died when they were 65, the insurance industry would extrapolate that on the population. In this example, all of the data point ages are entered into software with one specific purpose—to crunch the numbers and predict at what age, say, Mr X will probably die.

“Think how that will help the life insurance company in deciding the premium for a certain insurance cover,” he says.

 Data is king

Noting the problem with traditional software, Hasib says insurance companies in Bangladesh have been using them to only keep transactional records and as a mere repository of insurance data.

Besides, there is only a handful of insurance technology systems customised by the insurance companies in Bangladesh, but they rely on the old ways of using software: data is fed, it gets chewed up, and an answer spitted out, while leaving behind all sorts of valuable information. The old way of doing software is simply meant to drive efficiency and complete workflows.

“In reality, though, it is inefficient and leaves vast amounts of valuable data and information untouched because there is no machine-learning component at its core to harvest or utilise that information for purposes other than the original intent,” he says.

Rashid says intelligent software with machine-learning abilities, however, is designed to do much more than that and, fortunately, local developers in Bangladesh are now being able to design such software.

So how does this intelligent software make a difference?

“Let’s put it simply, it takes variables, does the ‘math’, and delivers the results you desire. So the results you desire depend on what you want in the first place. If you want your software to find the car owners in the Dhanmondi neighbourhood who haven’t got their cars insured yet, then the software will bring you that list, provided you have given the appropriate data input,’’ says the software engineer.

There is no problem of data in Bangladesh, as people do not hesitate to give personal data. The concept of data privacy is still in its infancy in Bangladesh, says Hasib.

The insurance companies in Bangladesh have to understand that software is an efficient, electronic mouse trap; software is basically a systematic way to collect data and efficiently process them for a specific, linear purpose.

 Machine-learning

Machine-learning can change everything. The problem, however, is the insurance companies still feel jittery in investing in IT. This is because they fear that the true digital environment is still not there in Bangladesh. Investing in machine-learning may not yield the desired result, they imagine.

But the point is, machine-learning allows companies not only to harvest ancillary data, but also provides the tools to aggregate and process that data from its raw form into insightful and useful information.

Talking with The Independent, Ahsanul Islam Titu, managing director of Sandhani Life Insurance Company Ltd, said he planned to digitise the entire operations of his company with the use of intelligent software.

He said that full digitisation basically means running a paperless insurance company. “This is quite a phenomenal change I say, because if you are familiar with the insurance sector of the country, you would know that almost everything here still relies on paper.”

Earlier, there were money receipts given against each transaction, called premiums or annual receipts. Now, at least, they have started giving money receipts in the form of computer-generated receipts.

“Another digitalised change in our company can be seen in case of bill payments, which were manually calculated earlier. Now this is totally automated; our computers are doing all the calculations and generating bills without making any errors and mistakes.”

He, however, said the installation of intelligent software would change the whole operation of the insurance industry in Bangladesh. “Bangladeshi insurance companies house an overwhelming amount of raw data. Unfortunately, for many companies, they are just stuck. Intelligent software will add dynamics to them.”

 

 

Intelligent insurance software

Machine-learning can change everything

The use of software has changed almost every aspect of industry and business, and the insurance sector is no exception. Even in the Bangladesh economy, where it has a modest size of USD 150 billion, there are 31 insurance companies, and all of them are using software to run their business. The problem is that even though these 31 insurance companiesand experts feel there are too many players in too small a marketare using software, the quality and the efficiency of the software being used needs to be put under the scanner. While insurance software in many developed countries rely on machine-learning to bag more customers and to draw more companies into the insurance network, insurance companies in Bangladesh still heavily depend on underpaid agents to do that job. This probably explains why, despite having 31 insurance companies, less than one per cent of the countrys population is insured and the sectors contribution to the economy is still below one per cent, say experts. Experts also say the introduction of intelligent insurance software, which uses machine-learning technology, could vastly increase the coverage, efficiency, and transparency of the insurance sector. Software solutions What does intelligent software mean? Hasib Muammar Rashid, a software engineer currently working on the development of intelligent software for the insurance sector, says: To have a clear idea of what insurance software can do, one first needs to understand the function of an actuarial table. Actuarial tables form a cornerstone of insurance and are a very basic form of machine-learning. Take, for instance, mortality tables. These tables produce highly specific and shockingly accurate projections of how long people born within a certain period will live. Hasib says these projections do not materialise out of thin air. They are formed and refined by millions of data points and real-life examples fed into the tables and evaluated at an aggregate level. To put it very simplify, if 1,000 people are recorded to have died when they were 65, the insurance industry would extrapolate that on the population. In this example, all of the data point ages are entered into software with one specific purposeto crunch the numbers and predict at what age, say, Mr X will probably die. Think how that will help the life insurance company in deciding the premium for a certain insurance cover, he says. Data is king Noting the problem with traditional software, Hasib says insurance companies in Bangladesh have been using them to only keep transactional records and as a mere repository of insurance data. Besides, there is only a handful of insurance technology systems customised by the insurance companies in Bangladesh, but they rely on the old ways of using software: data is fed, it gets chewed up, and an answer spitted out, while leaving behind all sorts of valuable information. The old way of doing software is simply meant to drive efficiency and complete workflows. In reality, though, it is inefficient and leaves vast amounts of valuable data and information untouched because there is no machine-learning component at its core to harvest or utilise that information for purposes other than the original intent, he says. Rashid says intelligent software with machine-learning abilities, however, is designed to do much more than that and, fortunately, local developers in Bangladesh are now being able to design such software. So how does this intelligent software make a difference? Lets put it simply, it takes variables, does the math, and delivers the results you desire. So the results you desire depend on what you want in the first place. If you want your software to find the car owners in the Dhanmondi neighbourhood who havent got their cars insured yet, then the software will bring you that list, provided you have given the appropriate data input, says the software engineer. There is no problem of data in Bangladesh, as people do not hesitate to give personal data. The concept of data privacy is still in its infancy in Bangladesh, says Hasib. The insurance companies in Bangladesh have to understand that software is an efficient, electronic mouse trap; software is basically a systematic way to collect data and efficiently process them for a specific, linear purpose. Machine-learning Machine-learning can change everything. The problem, however, is the insurance companies still feel jittery in investing in IT. This is because they fear that the true digital environment is still not there in Bangladesh. Investing in machine-learning may not yield the desired result, they imagine. But the point is, machine-learning allows companies not only to harvest ancillary data, but also provides the tools to aggregate and process that data from its raw form into insightful and useful information. Talking with The Independent, Ahsanul Islam Titu, managing director of Sandhani Life Insurance Company Ltd, said he planned to digitise the entire operations of his company with the use of intelligent software. He said that full digitisation basically means running a paperless insurance company. This is quite a phenomenal change I say, because if you are familiar with the insurance sector of the country, you would know that almost everything here still relies on paper. Earlier, there were money receipts given against each transaction, called premiums or annual receipts. Now, at least, they have started giving money receipts in the form of computer-generated receipts. Another digitalised change in our company can be seen in case of bill payments, which were manually calculated earlier. Now this is totally automated; our computers are doing all the calculations and generating bills without making any errors and mistakes. He, however, said the installation of intelligent software would change the whole operation of the insurance industry in Bangladesh. Bangladeshi insurance companies house an overwhelming amount of raw data. Unfortunately, for many companies, they are just stuck. Intelligent software will add dynamics to them.