Thiago Leite
Authors name: Thiago Leite October 15, 2020

The nearly three-centuries old insurance industry has been somewhat slow in catching up with the digital age. However, with every other industry embracing digitization, baseline customer expectations have changed dramatically over the past two decades or so. It is near impossible for insurance firms to match these expectations while retaining their traditional operational structures.

In a traditional setup, insurance companies deal with limited staff, complex procedures, long questionnaires, and under-pressure customer support. All of which act as negative barriers in customers’ perception of this industry.

Artificial intelligence (AI) is at the forefront of disruptive technologies that have the potential to transform the insurance landscape globally. With conversational AI enabling growth and disruption, insurers can address the demand for dynamic products and capture a new customer base comprising younger demographics.

That’s why 73% of insurance executives, according to a survey, are in favor of adopting technologies like predictive analysis and conversational AI to deliver an omnichannel experience and speed up the process of addressing and resolving user queries. At the same time, 74% of consumers also lean in favor of computer-generated insurance advice. 

That being said, this article takes a closer look at how AI-powered digital assistants can overhaul this industry for the better, the various use-cases that help to do so, and the resulting benefits that insurance companies can embrace.

Role of Conversational AI in enhancing the customer journey

Allstate, one of the biggest insurance companies in the US, deployed an AI-powered digital agent – in 2017. In nearly three years, this digital agent has handled three million calls in collaboration with live agents, achieving a success rate of 75% in cutting call durations and boosting customer satisfaction.

As you can see, conversational AI has already started making inroads into the insurance sector and disrupting processes. This includes the adoption of virtual and voice assistants for streamlining customer care experiences, end-to-end resolution of routine queries, automation of claim filing procedures, lead generation, personalization of policy recommendations, and so on.

In fact, the disruptive impact of conversation AI in the insurance sector is expected to grow exponentially over the next couple of years, leading to cost savings to the tune of $1.3 billion by 2023 – a steep rise from $300 million in 2019.

That’s primarily because, despite still taking hold in the insurance sector, conversational AI has done a lot to improve customer experiences and operational efficiency. Here are some digital tools that have enabled this transformative experience:

1. Personal digital assistants

A big part of our professional and personal lives today can be navigated from our smartphones. AI-powered personal digital assistants have the potential to fit into this space seamlessly. The Intelligent Virtual Assistant (IVA) deployed by an insurance provider can help their customers access relevant, personalized products on-demand.


2. Voice assistants

Virtual voice assistants are already a reality, with 8 billion devices powered by this technology expected to be in use by 2023, and a majority of people preferring voice search to look for products and services. With AI-based conversational IVRs, insurance customers can complete a wide range of conversations, ranging from policy recommendations to claim settlements and even buying new policies without the involvement of a live agent at all.

Farther into the future, it may not even be out of the ordinary to use home-based voice assistant devices like Alexa as a virtual insurance agent that can deliver this information to your customers with a single voice command.


3. Internet of things (IoT)

When it comes to leveraging the full potential of conversational AI in the insurance sector, the Internet of things (IoT) acts as a key piece of the puzzle. Something integral to making the process truly digitized and virtual. For example, say a person traveling in a ‘smart car’ meets with an accident. The sensors in this vehicle can immediately assess the damage and communicate it to a virtual agent, who can, in turn, share an estimate of repair costs and claim with the customer in a matter of minutes.  

IoT can make your gadgets, appliances, and vehicles talk to virtual agents directly, freeing you from the hassles of getting involved in the long-winding process of claim submission and processing.


Digital insurance agent use cases

It is a fact that conversational AI for insurance can improve customer experience through automated solutions. In this sector especially, AI solutions can be deployed to serve as the end consumer’s personal managers, besides offering valuable insights that companies can make their products and services more relevant and personalized. Here are some of the top use cases of deploying digital agents or "insurance chatbots" to fulfill these two end goals.


1. Automated claims management and process

Conversational AI can automate the claim process, making it a lot faster and more efficient. Conversational IVRs and AI assistants can instantly access a customer’s information from the company database, taking them through the process of filing and obtaining claims more swiftly and seamlessly as compared to waiting for a service representative to address their requirements. Digital agents can also be configured to prompt customers with reminders for upcoming payments. They can simplify the processing of payments across channels.


2. Generating insurance quotes

Conversational AI-powered digital assistants are also equipped to generate health insurance quotes and calculate premiums without the involvement of service representatives. When a customer reaches out to an insurance firm for a quote on a specific product, virtual assistants can take all the relevant information needed to calculate the risk factor, and then, offer them a quote in real-time.


3. Lead profiling and conversion

Based on the inputs provided by consumers, virtual agents can also segment them into different categories depending on factors such as age, risk, income group, job stability, and so on. They also help capture the full context of a potential consumer’s requirements. The data generated in the process proves instrumental in lead profiling, helping the sales teams achieve better conversion rates.

Besides, by instantly addressing a user’s questions, these virtual agents prove instrumental in nurturing potential leads. The likelihood of converting a lead decreases by 400% if their queries are not addressed in under 5 minutes. By cutting back on waiting time and long queues to access a live agent, these assistants can prevent the loss of potential customers.


4. Building a rich database

Like any other industry vertical, businesses in the insurance sector also need a rich database of contact information – emails, phone numbers or social media handles – to be able to promote their services to their target audience. Virtual agents can be programmed to collect this information during their interactions with any user. These contact details can be a game-changer in expanding the outreach of an insurance company’s marketing initiatives.


5. Assistance with policy research

Consumers today are savvy and prefer to do their research before approaching a service representation for quotes. Conversational AI insurance solutions can be leveraged here to assist the consumers in their life insurance policy research through e-offerings. Given the complex nature of insurance products, most users struggle to make sense of the details of a policy they may be interested in. This can be addressed by facilitating interactive Q&A sessions between users and virtual agents, with the help of conversation AI solutions. Once their doubts and concerns have been addressed, these virtual agents can guide customers through the purchase process eliminating the need to navigate a menu and taking them straight to the desired product.


Benefits of Conversational AI for the insurance sector

The up-and-coming digitized support system comprising virtual assistants, chatbots, and conversational IVR, backed by AI, Natural Language Understanding (NLU), and machine learning, brings many benefits to insurance providers.


1. Stronger brand image

By streamlining addressing customer queries, concerns, and automating a host of different operational processes, right from calculating premiums to settling claims, conversational AI can help build a strong brand image and business personality. A smooth and short call flow, for instance, can speak volumes about your business’ commitment to delivering an improved customer experience.


2. Operational efficiency

While insurance firms still need live agents to address complex or escalated customer concerns, speeding up a customer’s journey in the support service funnel is also equally important. A conversational AI-powered customer support system, with the right amount of human agents in the mix, can address both these requirements efficiently. Intuitive and intelligent virtual agents can handle queries and conversations that are generic. Live agents can seamlessly intervene and take over wherever necessary. This helps in reducing both call durations and operational costs, bringing in greater efficiency to the entire process.


3. Reduced costs

Every second spent interacting with a customer costs businesses money. By optimizing the process of routing calls to the resources in the shortest time frame possible, you can cut back on costs and build upon your bottom line. Conversational AI is at the heart of automating this process of quick and seamless transition while also providing customers with contextual and relevant information. Shifting from human to virtual agents can reduce the cost of every query from $15-$200 to just $1.


4. Sustainable self-service

Conversational AI can also make end-to-end self-service a reality in the insurance sector, proving to be a huge asset in the relationship-building process. AI-powered virtual assistants open up a new world of opportunities for businesses to offer a self-service model to the customers with more personalized and speedier interactions. Something that was unthinkable not so long ago, given the complex nature of insurance products. But the intelligent solutions offered by conversational AI are capable of responding to customers in a language they understand, using simple words and complete phrases. What’s more, thanks to NLU capabilities, they can also improve upon their responses, thus, becoming better equipped to handle more and more complex customer inputs.


5. Better customer insights

Being in tune with the customer’s requirements is essential for an insurance provider to be able to offer them relevant products. Conversational AI solutions prove to be a great asset on this front too. Conversation IVR systems, for instance, can gather data during interactions with customers and churn out analytics complete with visualizations. This gives you the power to tweak your products and services as per the changing customer expectations and demands.


6. Scalability

Conversational AI in insurance also makes it easier for companies to scale up operations and expand into a new market. For instance, if an insurance provider wants to expand operations on an international scale, virtual assistants can be leveraged to create a multilingual support system, catering to potential customers from different parts of the world. Thanks to AI and NLU capabilities, these digital agents can be configured to interact with consumers in different languages.


So, where does Conversational AI stand in the insurance sector?

With conversational AI gaining a stronger foothold in the insurance sector, the process of buying insurance, making claims, or simply just interacting with an insurer is poised to become more streamlined than ever before. In the not-so-distant future, we can expect some real disruption in this space. But even in their present form, conversational AI solutions are more than well-equipped to make insurance customers’ journeys more simplified and less intimidating.