This interview was published in InsurTech100 report.
The insurance market, like other key financial sectors, needs a way to service customers faster in the hyperconnected and digital age.
However, due to a few bad actors, it is not possible to directly trust the information that is provided to the insurer. Research is needed, and it
needs to be done on the spot. That is why the industry needs to start thinking about a Trust Automation strategy. And that is where FRISS comes in.
Back in 2006, Jeroen Morrenhof and Christian van Leeuwen – co-founders of FRISS – were working as consultants for large insurance firms. During this time, they noticed how illegitimate claims were affecting innocent consumers and began questioning why fraud was so widely tolerated. After hearing too many times that ‘its just a cost of doing business’, FRISS decided to do something about it. From here, the co-founders began building up the company now known as FRISS, which operates in over 45 countries globally and has more than 300 implementations. Research by the IFB previously found that honest families pay $400 to $700 per year in excess premium – just to
support the fraudsters in their schemes to make more money. “So, when FRISS helps make insurance more honest, we all benefit,” stated Morrenhof.
He added, “Winners use technology and data to obtain actionable insights giving them unprecedented control of their processes and risks. Insurance is all about trust. However, two unknown parties have a hard time trusting each other – so insurers develop processes to ensure trust. These processes take time, which lead to poor customer experiences. What is needed is a better way to analyse the available data to optimise processes.”
One of the key challenges in the insurance sector is building a greater level of trust in the business-to-customer relationship. With rocketing premiums as well as ongoing threats from fraudsters in the industry, the reasons behind the distrust in insurance are clear for all to see. FRISS offers a Trust Automation Platform that provides real-time, data-driven scores and insights that aims to give instant confidence and understanding of the inherent risks of all customers and interactions.
The company claims that based on next-generation AI insurance technology, Trust Automation enables users to confidently manage trust throughout the insurance value chain – from the first quote all the way through claims and investigations when needed. The company’s AI-powered score, meanwhile, combines text mining, machine learning, predictive models and network analysis with expert business knowledge of over 15 years of insurance experience, specific business configuration, proprietary data and external data sources.
What pain points is FRISS looking to solve? At the core, the company is looking to automate trust throughout the policy lifecycle – for different departments, however, this means different things. Morrenhof said, “A key element of a Trust Automation strategy is that it should cover the full policy lifecycle, from policy inception, to claims to investigations.”
For underwriting, the underwriting solution assesses risks in real-time – speeding up insurance decisions on whether or not to trust the potential policy holder. This helps carriers grow a profitable and trustworthy portfolio.
For commercial underwriting, by combining the power of data analytics and unprecedented speed, this solution enables commercial underwriters with actionable insights – so they can trust the information sent by insureds and write only the risks they want. “The FRISS score is a means to tie IT and the human element together. With the score, you are given a single variable that allows you to choose your process – whether that be straight through processing or a more human touch. Either way, the fraud evaluation is consistent throughout the process.”
In claims, the trust automation solution automatically tells adjusters which claims they should trust and which ones
require a deeper expert review to scout for fraud – so carriers only pay out legitimate claims.
For SIUs, FRISS’ solution provides extensive tools for investigators to quickly and efficiently investigate those individuals who may have betrayed trust and supports structured and confidential fact building for all flagged claims.
In the area of compliance, the FRISS compliance solutions allows for easy identification of who you are doing business with and ensures that they are legitimate. It also helps carriers to avoid reputational loss and financial penalties. Companies can also exercise CDD and KYC via automated processes and benefit from continuous compliance.
Trust and insurance
In an area that is as vulnerable to fraud as insurance is, developing and ensuring trust between business and consumer is vital. What role does trust automation play in insurance?
Morrenhof remarked, “In short, you could say that in every industry, customers desire faster services. In order to provide these, insurers need to digitise their experience and cut the fat in the processes.”
Why does FRISS think there is such a level of distrust in insurance? Morrenhof believes this problem is twofold. He detailed, “People at every level of the organization need to trust the data that is being presented to them – this isn’t always easy to trust data over your gut. In addition, clients often feel that insurance is not fair. Premiums are always getting higher and our intentions are questioned when, for instance, filing a claim. They get numerous questions on the how, why and what, while all they want is compensation for the loss. This feels unfair, because people have been paying their premiums, which makes the insurance company, unwillingly, the cash cow.”
Trust automation roadblocks
For those companies that are looking to offer trust automation products, there are still some key roadblocks that may stand in the road. What are these? Morrenhof said, “There has been a major shift to automating processes in the past year. Insurers are in various stages of maturity when it comes to automation – one thing however is clear: in order to cope with customer expectations, insurers need to improve processes and services. Data however is often scattered and it’s hard to create one comprehensive view of a customer.
“To that comes that when automating processes, taking trust automation into account is not always top of mind. Most times the core system is where it all begins. This modernisation of the core however can go hand in hand with automating trust.”
Trends and future plans
Post pandemic, industries globally have seen huge shifts in trends with the mass migration online caused by Covid-19. With more people than ever now online, there is a growing need for businesses to ensure that not only are they digitally sound but are building trusted digital relationships with their customers.
What are the key trends that stand out in InsurTech right now? Morrenhof explains, “The shift from customer experience to customer trust for sure is one. customer trust will replace customer experience as the foremost strategic term for positioning and messaging of differentiated
services. Organisations that can instil digital trust will be able to participate in 50% more ecosystems to expand revenue generation opportunities.”
Another area of interest highlighted by Morrenhof is embedded insurance, claiming that due to the fact that everything ‘gets connected’, people want to have a service that fits what they use and when they want to use it. Whether finding ways to identify new fraud schemes, or expanding its use of public and private data sources to identify new risk – FRISS is focused on continually adapting and innovating their Trust Automation platform so trust can be present throughout the policy lifecycle.
Whether finding ways to identify new fraud schemes, or expanding its use of public and private data sources to identify new risk – FRISS is focused on continually adapting and innovating their Trust Automation platform so trust can be present throughout the policy lifecycle.