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eNEWSLETTER  2016
 
From the Editor
 
It’s gone from science fiction to reality in industries the world over, from hype to our homes. It’s proving to be a game-changer in computing, entertainment and even medicine. We’re talking about Artificial Intelligence (AI), a nascent technology in travel and the (un)natural next step in tech-evolution following the use of big data to react to and engage with online customers.
 
Gradually, we’ll see more and broader applications of AI, and advanced versions of Lola, Spixii and other promoters of machine-learning will spark the attention of digitally-savvy customers. The immense potential of AI is beyond current comprehension, but in this newsletter we’ll explore how it’s already turning travel insurance on its head.
 
 
 
Expanding on Augmented Reality
 
   
Another tech area to watch is Augmented Reality (AR) – it’s not quite AI, but it’s got a wide range of uses, and the travel industry is realising those go far beyond mere marketing (where most of the focus has been until now). AR has potential in staff training, customer data collection (from games and tutorials) and even claims processing. More on that in one of the upcoming newsletters. For now, AI is changing the way insurance can be bought by customers. In the future, the financial planner entrusted with meeting and predicting your insurance needs could be AI-driven. Who knows?
 
hepstar selected for world's largest acceleraor program
 
   
We’re thrilled to announce that Hepstar has been selected to participate in the world’s largest start-up accelerator program. Plug and Play is the most active investment organisation in Silicon Valley, with portfolio companies including PayPal, Dropbox and Skytree. With partners like Lufthansa Group, LATAM Airlines, Turkish Airlines, TUI Group, Lufthansa and jetBlue Technology Ventures, Plug and Play provides a great opportunity for Hepstar to showcase our capabilities to some of the largest players in the travel sector.
   
Robo-insurers: the (un)natural next step
 
Defining AI can be a slippery task. Similar to human intelligence and the concept of an IQ, there are varying degrees of artificial intelligence. Let’s leave that debate for the academics and instead focus on what is the underlying principle of AI, i.e. the ability of a machine to learn and respond based on what it has learned. The ultimate goal of AI is to emulate the way humans think and our goal is to illustrate how it’s inspiring a re-think of the old adage that insurance is sold, not bought. The shake-up is in response to the changing demands of today’s insurance clients. People are looking online for insurance and expect faster response times, increased transparency and more personalised service. To date, online insurance products have been mostly static stock, but with the dawn of AI, there will be an increasing focus on providing personalised insurance, using big data on customer behaviour and machine learning to respond to or even predict customer needs.

AI is changing the Insuretech landscape, and has already made waves in the following five areas:
 
Automation
Are all aspects of your online business personalised? Ancillaries offer a prime opportunity to anticipate and meet travellers’ needs and the effects can be measured in a tangible increase in profits too. Your ancillary strategy requires a consideration of its emotional impact, as this plays a pivotal role in a customer’s purchasing decisions. A lack of personalisation has created an impatient online customer with a negative disposition towards ancillaries. Understanding their emotional journey can change their perception.
 
Data analysis
AI is able to gather customer and flight data and extremely effectively analyse patterns therein – making for better predictive models of expenses, losses, settlements and even fraudulent claims. This allows travel insurance companies to take a more proactive approach to risk management and insure risks they previously could not (encouraging product innovation). AI allows for more detailed customer profiling – the benefits of which transcend into the realm of personalisation.
 
Personalisation
So important, we dedicated last month’s entire newsletter to it! AI aims to identify and eventually understand what makes customers tick (thanks to bolstered data collection), which means we can offer them more tailored products (as well as more accurately-targeted ads). Secondly, AI allows insurers a ticket back to the days when every client had a personal broker who would build them a portfolio to suit their means and needs. Companies such as Hepstar give this a contemporary twist, reintroducing the personal (albeit virtual) touch and promoting a better customer experience.
 
Customer service
That brings us to the big one. A more personal approach, facilitated by AI, translates to more satisfied customers – and satisfaction, of course, is the seed of loyalty. Joining the line of future robo-insurers are fellow chatbots Lola, Pana and co. Leveraging the surging popularity of messaging apps (and anticipating the decline of email), these AI focused companies encourage customer engagement and create the opportunity for travellers to ask questions about their travel insurance product during purchase. These bot assistants currently augment human travel agents, providing always-on, instant service that aims to make trip planning easier and more enjoyable.

Trust
AI is being tasked with increasing the levels of trust customers (particularly younger ones) have in their insurers. It’s a big ask, but a necessary one. The insurance industry has long been bogged down by opacity and complexity. Apps like Lemonade, which offers household insurance to New Yorkers, are making headlines as they tackle this by automating services, accelerating sign-up and claim approvals, and making the whole process more transparent. At its service are two chatbots – modelled on actual staff members. Their compatriots in the travel insurance realm will effectively be doing the same thing.
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