The Vital Role of Chatbots in an Insurance Customer’s Journey

Chatbots in an Insurance Customer's Journey

If you think that the Insurance industry hasn’t caught up with technology yet, think again. Similar to FinTech, “InsurTech” as a concept is fast emerging and how. At the center of this digital disruption lies chatbots, a.k.a, automated virtual insurance agents. 

According to an Accenture Report, Insurers have been experimenting with chatbots for the past decade. So much so that contrary to popular belief, traditional insurance companies are also warming up to the idea of embracing chatbot technology to streamline their processes, leverage cost benefits, transform processes from reactive to proactive, and boost user satisfaction across various customer touch-points. In this blog, we will explore how chatbots are transforming the insurance sector, one policy at a time. Let’s get started.

Top 5 Ways in which Chatbots are Driving Digital Innovation in Insurance

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Fig: Top-Priority Insurance Functions for Chatbots – Image Source

Chatbots offer 24/7 Instantaneous Communication

The ‘always-on’ customer of today expects around-the-clock and speedy support. In fact, insurance companies, as a general rule of thumb, should enable customers to contact employees 24x7x365. 

In addition to providing excellent chatbot support, the bots should be able to route conversations with customers to the correct resource/department if the bot is unable to answer the query. By combining human agents and virtual agent support, insurance companies can level up their customer experience (CX) game.

Say, a human agent is unavailable to communicate with a customer, the bot can literally take over and answer routine questions or gather contact information and pass it on to the relevant team so that the company can get in touch with the customer later on. Here’s an example of a conversational Insurance claims chatbot – Lemonade – that set a world record for the fastest insurance payment claim that amounted to 3 seconds only. In a span of 3 seconds, the bot:

  • Reviewed the customer’s claim.
  • Cross-referenced it against the policy.
  • Ran 18 anti-fraud algorithms on it.
  • Approved it.
  • Sent wiring instructions to the bank for the money transfer.
  • Informed the customer about the good news.

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In addition to this, the chatbot can tailor personalized insurance policies and quotes for customers within the app.

Sounds too good to be true, right? That’s the power of using an AI bot in Insurance. 

Key takeaway: Chatbots have emerged as an alternative – and more effective – a form of customer communication, especially in the insurance field where customers expect instant and effective responses, night or day. That said, care must be taken to ensure that the conversations don’t feel robot-like or inferior to human-based conversations, which can have a negative impact and lead to loss of business. Plus, businesses can look at integrating text or voice commands into their existing chatbot functionalities to drive innovation and endless convenience for the customers. 

Chatbots Act as Handy Educational Tools

At any given point in time, customers are willing to learn more about their policies, renewals, and claims processes – especially since navigating the intricacies of these documents can become increasingly complex and difficult to understand. For example, there’s the issue of manual form-filling, long-form questionnaires, time-consuming background checks, choppy customer service, among others. In the same vein, insurers are constantly overwhelmed with repetitive questions about products and processes.

This is where chatbots can offer instant and instructive support while guiding customers to relevant knowledge bases so that they can self-serve. Plus, they can also throw some light on the insurance process and offer details on associated costs (an area of great interest for any customer). An interesting example to consider in this regard is Next Insurance’s website chatbot. The moment you land on the website, you will be greeted with a host of super-useful preset questions so that you can navigate through the website in a productive manner without wasting your time:

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Key takeaway: It’s no secret that the Insurance value chain – from pre-purchase and purchase to post-purchase customer service and back-end operations – is service-oriented and people-centric. It is across these critical touch-points that chatbots can ease the complexity and iron out key issues that accompany insurance transactions, products, and processes.

Chatbots can scale up your operations and reduce costs

Chatbots are expected to generate more than $8 billion in savings globally by 2022.

Tying back to the first point, insurance chatbots can handle multiple customers and questions at once, thus lowering the resolution time and the costs involved. As an added bonus, chatbots can handle customers without getting tired, taking breaks, or letting unconscious bias trickle in. Plus, they can take off some of the much-needed workloads by automating routine tasks and freeing up the employees. In such a scenario, employees can then focus on unhappy and frustrated customers and work towards enhancing the customer experience across touch-points for them.

Let’s look at a real-life chatbot to understand this better. Trov’s chatbot, according to sources, was the world’s first on-demand insurance app for single items (read: electronic gadgets, home appliances, sports equipment, musical instruments, etc.) when it was launched in Australia in 2016. Over the years, over 100,000,000 items have been added to people’s Trovs globally, amounting to a total value of $10 billion USD.

Exclusively made for the mobile-savvy generation, the in-app chatbot can handle claims by asking users relevant questions regarding the incident. The whole claims process is simplified to something as easy and familiar as sending texts. In cases where the claim is accepted, the item will either be replaced or repaired, or alternatively, the user will be reimbursed:

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Image Source

Excellent example to consider is Allstate’s “ABIE” chatbot, whose sole purpose was to assist the agents in selling commercial insurance products. Here’s how the chatbot works:

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Image Source

  • ABIE walks the agents through the commercial selling process.
  • It then helps retrieve the required documents.
  • Next, the bot works on gauging which product an agent is working on, where they are in the process, and who they are so that it can provide sensitive, data-driven, and contextual assistance.

All in all, ABIE provides real-time insight into top-of-the-mind questions and topics for small business owners and entrepreneurs.

“ABle handles more than 25,000 inquiries per month.”

Key takeaway: Chatbots can be thought of as innovative information retrieval tools that can also assist multiple users with contextual information and reduce logistical costs in addition to lowering the workload of your already overwhelmed sales team.

Chatbots can help gather quality leads

Let’s say a customer has just logged onto your website at 2 a.m. and is browsing through the various insurance plans available. Wouldn’t it be great if you could assist them at that hour? And more importantly, gather critical information such as name and email address so that your sales team can contact them later on and follow up with context?

Chatbots can help you achieve all this and more by gathering basic contact information. Take the example of Next Insurance’s onboarding chatbot:

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Image Source

The chatbot allows users to sign up for its personal trainers’ insurance plans using the widely-used Facebook Messenger platform. The bot conveniently collects all the user data directly through the chat. 

Key takeaway: If gathering rich, quality leads sits high on your priority list (as it should), you can use chatbots that help accumulate customer data and generate leads in a simple and seamless manner.

Chatbots can engage with customers and collect feedback

Closing the loop on customer feedback is vital to any business, let alone the insurance sector. The central idea is to understand the customer’s expectations and compile data on wide-ranging customer service inquiries. How does this help?

Using real-time data can allow insurance companies to alter their products/services more to a customer’s liking and drive a positive user experience from start to finish. Additionally, remember that chatbots, in general, are faster, more efficient, and convenient in collecting user feedback as opposed to their counterparts (think: phone calls and emails). 

Moving on, let’s look at the web-based LeO chatbot that can provide personalized quotes for home and auto insurance in an instant. More importantly, the chatbot routinely collects and analyzes data from customer conversations as well as social media and third-party sources to enhance coverage offerings. That’s not all. 

The bot makes excellent use of natural language processing (NLP) to schedule calls and meetings, collect leads, and automate customer service operations. So whether you wish to manage cross-sells, leads, and renewals campaigns or gain insights and analyze interactions; this chatbot should be your go-to tool:

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Key takeaway: Even in the Insurance world, collecting user feedback and acting on it can improve your offering and boost customer satisfaction. This is where using a conversational, AI-powered chatbot can make all the difference. That said, the chatbot should be intelligent enough to gather all the relevant data and intuitive enough to read between the lines, extract context, sense the user’s sentiment/mood, and provide dynamic information. 

On a Final Note

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Application of Chatbots in Different Areas of the Insurance Lifecycle and for Diverse Target Groups as per a Cognizant Study – Image Source

The global chatbot market is expected that it will reach to USD$1.25 billion 
by 2025, growing at a CAGR of 24.3%.

Any way you slice it, insurance chatbots are optimizing the customer experience 24/7 by driving instant communication, effective comprehension, and all-round collaboration. To wrap up, here’s a quick lowdown of how chatbots are boosting user satisfaction while upping sales in the Insurance sector, a win-win for all:

  • Offer 24/7 instantaneous communication.
  • Act as a handy educational tool.
  • Help scale up operations while lowering costs.
  • Assist in gathering quality leads.
  • Engage with customers and gather quality feedback.

Chatbots may not be able to replace human agents altogether in the insurance industry, but they do act as a handy virtual guide for agents and customers alike. In simpler words, increased collaboration between the two entities can bring to life a true-to-form conversational experience that your customers will love and cherish.