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How Are Insurance Chatbots Transforming Customer Experience in the Insurance Industry?

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Harshika Alagh

With the world becoming more digital, legacy systems in the insurance industry are transforming. Customers now have quick access to information and are no longer left out of the loop. Digitalization has demystified insurance processes for the customers. Today, they can shop for policies online, read reviews and compare offerings of different insurance providers and even self-service their policies. 

Moreover, with rising competition in the insurance industry, customers have far too many options to choose from. So, if a provider fails to meet their expectations, they will quickly shift to a competitor. They expect seamless, on-demand services and a more personalized experience. 

It would be difficult to imagine having these expectations met with old, complex processes. To bridge this gap, insurers and insurtechs around the world are investing in AI-powered insurance chatbots to enhance customer experience. 

In this article today, we’ll have a look at how chatbots are making a difference in the insurance industry and what does the future hold for them?

The global rise of chatbot popularity 

The rise of messaging apps has made chat the preferred mode of communication online. Customers expect to be able to communicate with brands over chat for instant resolution of queries. 

On the other hand, the pandemic has accelerated the shift towards a digital world. Businesses around the globe are experiencing record high engagement from customers. It can get overwhelming for human agents to keep up and provide efficient customer service without the involvement of conversational AI.

Gartner predicts that by 2022, 70% of customer interactions will involve emerging technologies such as machine learning (ML) applications, chatbots and mobile messaging, up from 15% in 2018. 

Benefits of insurance chatbots 

Insurance chatbots are beneficial for both insurance companies and customers alike. Where on one hand, chatbots empower support teams to provide a more proactive and personalized customer experience. They sure are making the customers’ life easier as well. 

How insurance chatbots help policyholders

The insurance processes can be quite complicated and full of hefty paperwork. It’s safe to say that customers don’t mind getting real-time support throughout their journey. According to a 2019 Statista survey, 43% of customers are comfortable using chatbots to buy insurance policies. Whereas, 44% prefer using chatbots to make insurance claims. 

Further benefits include-

1. 24/7 Customer support

Insurance documents are a complicated maze of clauses, terms and conditions. This is because of stringent regulations in the industry. Companies make sure that the documents are comprehensive and cover all their bases in case of a large claim or a lawsuit.

So understandably these documents are very hard to read. It's natural for customers to have loads of questions. Intelligent chatbots that leverage natural language processing (NLP) will not only be available 24/7 but also solve 80% of queries without human intervention. 

2. Simplify the claims process: 

Settlement of claims requires the involvement of providers, adjusters, inspectors and agents. It’s a tardy process that takes around 30 days or sometimes even more. Meanwhile, the customers have to constantly follow up with a customer rep to check the status of the claim. 

With the help of an insurance chatbot, making and checking up on claims is as easy as it gets. Policyholders just have to tell about the nature of the claim. The bot then asks for a few additional details, pulls up the customer’s policy from the company's CRM and immediately initiates the claims filing process. 

How chatbots help insurance companies 

1. Improve team productivity

Most of the queries that the customer support teams receive on a day-to-day basis are repetitive in nature. Such matters can easily be solved by an AI chatbot and the support agents can free up their valuable time to tend to more pressing customer problems. This way an insurance company can serve more customers in a day, deliver better satisfaction and improve team productivity. 

2. Cost reduction

By using a chatbot, an insurance company can significantly reduce its customer support costs. A single chatbot can efficiently handle a major volume of queries that would otherwise require a large customer support staff. 

Chatbots are also able to provide instant resolution and fast response to the customers. It will be easier for an insurance provider to scale up its customer support efforts using an insurance chatbot instead of hiring and training a huge support team. 

3. Competitive differentiation

The insurance landscape is getting more competitive every coming day. The pricing, products and policies are similar throughout the industry. The key differentiator of business performance is customer experience. 

Being an insurance provider, the best thing you can do for your customers is meet them where they are. Chatbots can help you always stay connected with your customers over platforms like WhatsApp business and Apple Business Chat. 

4. More engaged customers

The key to always having your customers’ attention is by keeping them engaged. By using an insurance chatbot to send prompts and real-time notifications to customers will improve brand engagement. AI bots can keep customers informed about the status of their claims, premium due dates, policy renewals and any new offers or updates.  

5. Lead generation 

 AI in insurance is growing by leaps and bounds and rightly so, it’s helping companies cut costs and boost sales. Besides quick responses to questions, chatbots also collect customer details throughout the conversation. They later use these details to make personalized policy recommendations

6. Assist insurance agents

Quite contrary to what people may believe, chatbots do not make human agents redundant. Rather, if used strategically, insurance chatbots can help increase the productivity of the support team. Chatbots not only solve menial queries for human agents but also equip them with better context about the customer’s intent, requirements and risk profile. 

Applications of chatbots in the insurance industry 

Managing claims, 24/7 support and quick response to queries are just a few of the applications of an insurance chatbot, some others are:

1. Provide customised quotes

Chatbots collect all the required information from the customers like finances, properties, health status, or any other relevant data to advise new customers about the policies that fit their criteria. 

2. Damage assessment 

Based on the type of insurance, the chatbot can ask the policyholder for relevant eligibility verification which includes uploading images of the damaged property. A human agent then verifies the damage and determines liabilities. 

3. Claim processing & settlement

Following the damage assessment, the insurer sends the reimbursement amount to the policyholder. The chatbot sends proactive alerts to keep the customer updated. 

4. Fraud detection

Many insurers lose up to 10-15% across all lines of their business due to fraudulent claims. AI insurance chatbots have the ability to review claims using fraud detection algorithms. On verification, the payment details are then sent to the bank for settlement.

5. Document processing

One simple application of a chatbot in an insurance company is document intake and processing. Customers can upload their documents in the chat and the bots can process these documents within seconds. The insurer can also inform the customer about any issues with the submitted documents via chatbot. 

Future of AI chatbots in the insurance industry

With multiple use cases in the industry, chatbots are expected to play an important role throughout the insurance value chain. Starting from pre-purchase, purchase, customer service, marketing and other back-end operations, chatbots are poised to be the innovation in insurance. 

Consider this scenario a few years down the line:

You are driving to an out-of-town meeting when you meet with an accident with another car. As soon as the car stops, you receive a call from your auto insurer’s chatbot who notifies you to take pictures of the damaged car. Right when you send the pictures, the chatbot calculates the damage, makes the claim for you, and replies with the approval, within minutes. 

Yes, this may sound a bit far-fetched but in a few years, we can expect to achieve a level of advancement close enough to this scenario. 

Human agents and chatbots: What does the future look like

The role of human agents will also transform from mere intermediaries to advisories. With the help of smart personal assistants, agents will be able to focus on offering relevant coverage to the customers and helping them manage their portfolios. 

AI chatbots will be able to anticipate the future needs of the customers and tailor each conversation accordingly to meet the needs of individual clients. Chatbots will also make use of advanced technologies such as blockchain and IoT. New use cases and insurance products will emerge in the light of new technologies. 

The pace of advancement is only expected to accelerate with time and the insurance chatbot frontier is bound to flourish far into the future. 

You can start your CX automation journey today by building the perfect AI chatbot for your insurance company. With the help of Yellow.ai’s no code platform, you can build a bot within minutes for a single channel like a website or WhatsApp, and deploy it easily across 35+ channels, including ‘Voice’, with just a single click. 

Get in touch with our experts to know more about how you can build a fully functional chatbot without writing a single line of code. 

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Harshika Alagh

Harshika is a content marketing writer at Yellow.ai who's passionate about writing data-driven and actionable long-form content in the tech, communication and education niches. She thinks outside the box and believes in sharing the true vision of a brand with its audience. Her other interests are painting and singing.

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