Inside Rakuten AI: Emiko Kosaki shares how AI is reshaping insurance

The vision of artificial intelligence as a business partner shouldering routine tasks and advising us to help us improve strategic actions is reshaping many areas of industry, including the insurance sector. Traditionally seen as a field rooted in complex actuarial science and cumbersome processes, insurance is now embracing AI to enhance everything from customer acquisition to claims processing.

One of the leaders in the transformation is Emiko Kosaki, Executive Officer at Rakuten Insurance Holdings, who brings a unique perspective, overseeing both marketing strategy planning and AI promotion planning and management. Her dual role perfectly positions her to articulate how AI is not just a technological enhancement but a fundamental tool for understanding and serving customers better.

A seamless approach to diverse insurance offerings

Rakuten’s insurance business encompasses Rakuten Life and Rakuten General Insurance, offering a wide array of products, from auto, pet, bicycle, golf and travel insurance under general insurance, to life, medical and cancer insurance from Rakuten Life.

Kosaki highlights the breadth of her team’s work across diverse insurance products. “My team is responsible for marketing a comprehensive portfolio, ensuring a seamless and integrated approach. We strive to seamlessly handle the marketing for all these insurance types,” she states.

However, the application of AI within Rakuten’s insurance business extends far beyond just marketing. Kosaki emphasizes a holistic integration across various operational processes. “The insurance business involves many different processes,” she notes. “There’s marketing, which I’m responsible for, but also product development, customer inquiries, and processing claims when customers experience accidents or illnesses.”

Kosaki and her team are on a mission to embed AI into each step of this value chain. “We are actively promoting AI utilization by involving people from various departments and closely collaborating with them to integrate AI into each part of the value chain.”

The rich Rakuten Ecosystem data provides a powerful advantage for her domain of insurance marketing. This includes basic customer attributes, purchasing history, point usage data and membership information. For some customers, even details like car manufacturer and model are available.

“We leverage this kind of data, to strategically conduct our marketing,” Kosaki explains. “By further combining this data-led approach with the power of AI, we can predict who is most likely to subscribe to insurance at a given time, and then approach them through the appropriate touchpoint at the right moment. This is data-driven marketing in action.”

The transformative impact of AI in insurance marketing

The shift to AI-powered marketing has yielded significant, tangible benefits for Rakuten Insurance. Kosaki contrasts their new approach with traditional methods. “Normal auto insurance marketing starts off with a massive blitz of TV commercials just to build awareness,” she points out. “Initially, there is no actionable data so it becomes a very costly and labor-intensive marketing effort just to educate those who first show interest about auto insurance.”

“In contrast, because we have Rakuten’s data and AI capabilities to revolutionize this process, we can conduct extremely efficient marketing,” Kosaki states. She shares a compelling example, “There have been cases where we acquired auto insurance contracts at about half the customer acquisition cost of other companies.” This demonstrates the profound impact of AI on optimizing marketing spend and effectiveness.

While AI’s impact on marketing is clear, its potential in other areas of the insurance business is equally significant. Kosaki highlights a critical application in claims processing, an area central to customer trust and satisfaction. “An example of where AI utilization can add real value is for the typical insurance use case of responding to customers when they have an accident,” she explains. “The most important thing for an insurance company is to quickly pay out claims whenever a customer is involved in an accident.”

However, auto accidents are extermely complex and varied, influenced by factors like weather, time, and driver behavior, making each incident a unique case in itself. Determining the At-Fault Ratio, or the proportion of responsibility for an accident, is a highly specialized and time-consuming process. “It’s an incredibly difficult task that involves analyzing each accident’s specific circumstances, consulting past precedents, and requires expert knowledge,” Kosaki states. “This complexity can often lead to delays in claim payouts, causing additional stress for customers.”

To address this, Rakuten Insurance is exploring how AI can assist. “We are currently trying to leverage AI by inputting past precedents of At-Fault Ratios into it,” Kosaki reveals. “When a new, unique accident occurs, the AI can then provide reference material for consideration. For example, the AI may advise us as that in a past similar case, the At-Fault Ratio was this much, so for this case, it would likely be around this amount.”

While this application is still in the research phase, this initiative is about much more than just automating a complex task. “What’s most important about this use case is not the fact that AI can tackle difficult tasks to support insurance professionals, it’s the capacity for it to improve our customer service quality and speed,” Kosaki concludes, underscoring her team’s deep commitment to enhancing the customer experience.

A future vision of hyper-personalized insurance

Looking to the future, Kosaki envisions a significant evolution in how insurance products are priced and offered, particularly in the auto insurance sector. “Traditionally, auto insurance premiums have been determined by a limited set of data points common across the industry,” she explains. “We look at factors such as the policyholder’s age, car model, and vehicle age.”

However, Rakuten’s unique access to extensive data allows for a more granular and personalized approach. “Because we have Rakuten’s data, we can now better predict a custom’s likelihood of having an accident,” Kosaki claims.

This capability opens doors to a new era of insurance. “I believe we can challenge ourselves to create more personalized and precise pricing, distinct from the limited data-driven insurance models of the past.” This future vision explores the development of insurance policies that are not just tailored to general demographics but to the individual’s specific risk profile, driven by their unique data assests within the Rakuten Ecosystem.

Finally, Kosaki addresses common misconceptions about AI. “Many people still see AI and data as either robotic or super complicated,” she acknowledges. Yet, for her, as a marketer, AI is a profoundly human-centric tool. “As a marketer, I see AI as an indispensable tool for understanding customers better and enhancing their convenience,” she emphasizes.

Her ultimate goal is to harness AI to build stronger relationships with customers. “As someone working with both AI and in marketing, I want to effectively leverage the power of AI to create insurance services that are loved by our customers,” Kosaki shares.

This powerful statement encapsulates Rakuten’s conviction that AI is not merely a technological advancement but a vital enabler for fostering deeper customer connections and delivering real value in the insurance landscape.