There have been many changes in the insurance sector in the past couple of years, including digital modernisation (with shifts in operating models, culture and architecture), increased customisation of products, higher usage of data analytics, and the constantly growing InsurTech space.

As the industry keeps on changing, technology is becoming increasingly important to enable carriers to compete in this new environment. It is apparent that this space is evolving in a way that will see new technologies having a tremendous impact on how insurers interact with their customers.

Despite the general perception of the insurance industry being slow, overly conservative, and unwilling to change, new studies suggest that this very industry is transforming faster than others, investing in technologies that help them deliver better customer service and experience. These investments, include artificial intelligence, where, according to a study conducted by TCS, “the insurance industry outspent the other twelve verticals surveyed, investing on average $124 million in AI systems, compared to a cross-industry average of $70 million”.


The Rise of Chatbots

Chatbots appear to be an appealing option where insurance companies are striving to bring mass personalisation and speed of service to their customers. The chatbot potential to add additional insights, improve customer and agent experience and cut costs is an invaluable prospect.

Companies across the globe have been experimenting with chatbots for more than 50 years (starting with ELIZA in 1966 (MIT) with the first take on NLP, through Clippy (Microsoft) in 1996 using Bayesian algorithms to help (in practice, annoy) Office users, up to Apple's Siri in 2008, which is perhaps the earliest (chat)bot that comes to mind when most people are asked about the aforesaid technology).

The biggest thing that was missing in the early iterations of chatbots was the fact that they were disconnected from their users (customers in our context), lacking meaningful data and insights. 


Chatbots in Insurance

With the fast advancement in technology, insurance companies have a tremendous opportunity to get it right this time. With artificial intelligence, we are now uniquely positioned to capture data, learn from it, and then put things back in context to help insurance companies take better actions. In my opinion, if the insurers want to deliver successful chatbot experience to their customers, they need to:


  1. Think about customer experience first and foremost
  2. Know who the customers are and have enough context to understand what policies they have and why they might be contacting us
  3. Have all the data in one place (CRM, customer service, marketing, underwriting, previous claims,invoicing, payments, and other back-end data as well as all the business processes that the bots can take actions on and deliver meaningful responses)
  4. Have processes in place to seamlessly hand-off cases to an agent if the issue is too complex (collecting and qualifying information in the first place, though, so as the agent doesn't have to do it again)
  5. Have the right technology in place to make building, training and deploying the bots easy.



Business benefits

AI-powered chatbots can help insurance organisations with predictive insights (detecting fraud, calculating loss, litigation, predicted handling time), help with image classification and object detection (which might be useful in car or home insurance among others), analyse text sentiment or help with claims segmentation and classifiaction by using factual and predictive claims characteristics. 

Chatbots have a chance to deliver a truly connected customer experience and help insurers scale and grow if approached correctly. It's a win-win situation with customer satisfaction rising (think about CSAT and NPS scores) and increased agent productivity. Claims agents with augmented AI tools will be able to review and process claims quicker as once the claim is pre-classified, you can triage and route it intelligently to the right person at the right time (or process it automatically if agent's involvement is not required). 


What's next?

Artificial Intelligence will transform the way businesses operate, but for the transformation to happen, insurers need to change their mindset around the significance of digital insurance. As McKinsey have correctly pointed out, “(i)nsurance executives must understand the factors that will contribute to (the) change and how AI will reshape claims, distribution, and underwriting and pricing. With this understanding, they can start to build the skills and talent, embrace the emerging technologies, and create the culture and perspective needed to be successful players in the insurance industry of the future.”


To start your AI journey today, have a look at The Big Book of Customer Predictions or check the Get Smarter with Einstein trail on Trailhead.