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Insurance Chatbots: A Potential Game Changer for Insurance Companies

Updated on
Jan 5, 20249 min read
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    Table of content

  • Top 9 Insurance Chatbots Use Cases
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  • Here are six solid benefits of utilizing Insurance Chatbots
  • AI chatbots' future in the Insurance Business
  • Future of human agents and chatbots

The insurance industry is usually associated with antiquated procedures, enormous documentation, and complicated situations. How are AI chatbots affecting the insurance industry?

People may be forgiven for believing that digitalization has little room in the industry. However, innovation is required across every sector. Those that fail to ride the tide of innovation may find themselves on the verge of extinction.

Consumer demands have dramatically changed the way organizations operate in a wide range of industries. Companies are becoming more competitive, and customers have far more alternatives than before.

According to a survey undertaken by Accenture, 74% of respondents would be willing to purchase insurance from non-insurance organizations. Nowadays, a company's offering and product aren't enough to distinguish it. Customer experience is a brand distinction that should not be disregarded.

Potential consumers who are digital natives and have high expectations for how a business serves them have evolved due to generational shifts. These demands should not be underrated: one-third of customers said they would consider shifting businesses after only one horrible experience.

Besides that, Covid-19 has highlighted the importance of providing competent service to confined customers at home and overcoming the dilemma of being unable to access staff members.

Support centers are the most common solution for interacting with client issues. These, on the other hand, are not only expensive but also nearly outdated because staff cannot be reached to answer calls. Moreover, the sheer quantity of customers demands a scalable customer service that can respond to these needs 24 hours a day, in different languages, and through numerous digital platforms while ensuring individualized interactions.

These expectations are not unreasonable. Conversational AI is the answer to these requests that already exist.

Top 9 Insurance Chatbots Use Cases


1. Personalized, immediate quotes

A chatbot may collect essential information about automobiles, healthcare, properties, and other aspects when a potential customer requests a quotation and give a customized price in seconds. People may ask queries during the information collecting process using chatbots that use Natural Language Understanding (NLU) instead of rigid decision trees, giving them a comparable experience to interacting with a human agent.


2. Making a claim

When a policyholder has to file claims, a chatbot can gather all the necessary information. It might include searching for required documents and requesting photographs or video, depending on the type of insurance or claim. Chatbots can also ask for fresh photos or files if a file does not satisfy standards using AI-powered image recognition technology. For example, after releasing its chatbot, Metromile, an American vehicle insurance business, accepted 70-80% of claims almost promptly.


3. Updates on claim status

Chatbots may clear structure out to policyholders when the status of a claim changes, keeping them updated throughout the process. It cuts down on the time a consumer needs to wait.


4. Personalized insurance advice and instruction

A chatbot can offer updates in seconds if a policyholder contacts them with inquiries about coverage and policy details. A chatbot can also answer queries about a company's products and services. A chatbot may also strategically contact out with crucial information at essential points in the customer journey based on when questions emerge based on items utilized and profile factors.


5. Anti-fraud measures

Property-casualty fraud costs the United States $30 billion per year6. Chatbots enabled by artificial intelligence may detect suspected fraud, probe the client for further proof or documentation, and aggravate the situation to the appropriate management. For providers, scam safeguards may save them a lot of money.


6. Customizing comments

More customization is expected by 88 percent of insurance policyholders.AI may assist staff in providing customized comments to consumers by selecting data through back-end systems on their behalf and even writing personalized responses.


7. Quick responses to frequently asked questions

Account administration, cancellations, discounts, cards and documents, and billing/payment are topics to which AI-powered chatbots can quickly respond. Agents can engage in more complicated challenges by automating these extremely repetitive searches.


8. AI-assisted ticket triage

An AI chatbot can act as a first defense line in more complicated issues, collecting information from policyholders before passing it on to a representative. It can help agents operate more efficiently and reduce resolution time.


9. Upselling and cross-selling

AI-powered suggestion tools can locate the ideal products and services for salespeople to cross-sell or up-sell and the precise moment during a discussion or the customer experience when a policyholder is most likely to buy.

Here are six solid benefits of utilizing Insurance Chatbots

Both insurance corporations and customers benefit from insurance chatbots. On the one side, chatbots enable customer service representatives to give a more active and targeted customer experience. They are certainly making customers' lives simpler.


1. Simplify complex processes

Insurance claims may be complicated and time-consuming to process. Customers seem not to mind receiving genuine help throughout their experience. According to a 2019 Statista poll, 43% of clients are comfortable buying insurance policies using chatbots. When it comes to filing insurance claims, however, 44% prefer to use chatbots.


2. Continuous customer service

Insurance policies are a complexity of clauses, terms, and conditions. It is due to the industry's heavy limitations. In the event of a significant claim or a challenge, companies will ensure that the documents are detailed and cover all of their bases.

So obviously, these documents are complicated to read. Buyers are bound to have a bunch of queries. Intelligent chatbots that use natural language processing (NLP) will not only be available 24 hours a day but will also be able to answer 80% of questions without the need for human participation.

3. Boost agent efficiency

The majority of the questions that customer service representatives receive daily are repetitive. An AI chatbot may readily resolve such issues, freeing support personnel time to focus on more critical client issues. An insurance company can serve more customers per day, improve customer satisfaction, and increase team productivity.

4. Cost-cutting

An insurance company's customer support expenditures can be significantly reduced by using a chatbot. A single chatbot may manage many queries that need an extensive customer service team.

Chatbots may also give clients immediate solutions and quick responses. Instead of employing and training a large support workforce, an insurance provider may exponentially grow its customer support activities by deploying an insurance chatbot.


5. More enthusiastic customers

Maintaining your client's interest is the key to keeping their attention. Improve client engagement by employing an insurance chatbot to offer prompts and real-time updates. Customers can be updated on the progress of their claims using AI bots.


6. Assist insurance agents

Contrary to popular belief, chatbots do not replace the need for human agents. On the other hand, insurance chatbots can help boost the support team's efficiency if appropriately deployed. Chatbots provide human agents with more knowledge about the customer's purpose, requirements, and risk profile and answer routine questions.

AI chatbots' future in the Insurance Business

Chatbots are likely to play a vital role throughout the insurance value chain, with many use cases. Chatbots are positioned to be the insurance innovation, starting with before, purchase, customer service, marketing, and other back-end operations.

Consider the following scenario a few years from now:

You're traveling to a meeting out of town when you collide with another vehicle. You get a contact from your auto insurer's chatbot as soon as the automobile comes to a halt, telling you to snap images of the damaged vehicle. Within minutes of sending the photos, the chatbot estimates the damage, files the claim, and responds with approval.

Future of human agents and chatbots

Human agents' roles will also shift from simply mediators to advisors. An agent should be able to focus on providing relevant insurance to consumers and assisting them in managing their portfolios with the support of intelligent personal assistants.

AI chatbots should be able to predict future consumer wants and personalize each discussion to match each client's specific needs. Advanced technologies like blockchain and IoT will be used by chatbots. In light of emerging technology, new capabilities and insurance products will arise.

The rate of advancement is only expected to pick up, and the insurance chatbot frontier is sure to thrive for a long time.

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