The rise of insurance chatbots

A person is interacting with a ChatBot on his mobile phone.

Shopping for insurance and making a claim can be stressful. Emailing or filling out forms. Chatbots are computer programs that people interact with. They use conversational interfaces to mimic human conversation, so the experience of using one is closer to chatting with a real person than filling out a web form. Chatbots are used for business, customer service, and fun. They can help you pick out a pair of shoes, tell you about the weather or advise you on how to manage your finances. They can also answer questions with accuracy, speed, and personality—all valuable qualities in the insurance industry.

Chatbots for claims, policy purchases and handler support

Chatbots have a number of uses for insurers, from handling customers' claims to helping employees provide a better service. Their popularity is growing quickly, too. In a recent survey of the insurance industry, 68% of respondents said their insurance company used some form of artificial intelligence-powered virtual assistant, and insurers are expected to be spending an average of $90 million on AI by 2020.

Survey data:  68% insurance companies use some form of chatbot, $90M  estimated spend on AI by 2020The rise of chatbots can be attributed not only to their effectiveness but also to the flaws of other modes of communication. Chatbots can run inline on a company's website, which is a significant advantage when so many of us own smartphones which are full to capacity with apps we don't use. Chatbots can provide a seamless experience, from the moment a potential customer lands on an insurer's webpage, to the generation of a quote, to the purchase.

Emails and web forms have their drawbacks, too. The process of finding the correct address, sending a message and waiting for a response is often arduous and could be off-putting to someone searching for insurance. Chatbots answer questions instantly. They can be trained on a massive volume of data, so their responses can be highly accurate and tailored to the needs of individual customers.

Chatbots even have certain advantages over humans. They can access information which human claims handlers could never be expected to learn, so their responses can be faster and more detailed. They could also save insurers a considerable amount of money because, unlike people, they can handle multiple queries simultaneously.

Insurance companies which add AI-powered personal assistants to their websites could increase their chances of making a sale. Instead of patiently inputting information and waiting for page reloads, users can get instant results. A chatbot can ask for all the relevant information, process it and produce a quote, reducing the risk of the shopper looking elsewhere.

Taking the stress out of insurance around the world

Chatbots built by IBM Watson, Polish Online Care ins. company 'Link4' and digital insurer "Lemonade"Insurers all over the globe are developing chatbots for a variety of functions. Magda provides round-the-clock advice to customers on the website of Polish online car insurance company Link4. Mia answers questions about insurance on the Co-op Bank's site. And Hanna has provided customer service for the Swedish Social Insurance Agency for more than a decade.

Singaporean PolicyPal recently launched a chatbot powered by IBM Watson Conversation, which allows customers to buy and manage their insurance policies quickly and easily on their mobiles. It was given in-depth training on 9,000 policies, enabling it to respond to customers' queries with an impressive degree of precision. Watson Conversation uses natural language processing (NLP) and machine learning (ML) to simulate natural human conversation, so users' experiences are far livelier and more engaging than more traditional forms. It provides clear explanations of insurance jargon, too, and can react instantly to questions, helping customers to understand policies faster.

Digital Insurer Lemonade's chatbot, Maya, sells insurance for homeowners and renters, while their claims-bot, Al Jim, processes calls faster than most humans could—it recently settled a claim in just three seconds.

It's not just customer service where chatbots are making an impact on insurance companies. Clara Analytics' AskClara is a 24/7 personal assistant for claims handlers, providing detailed guidance, tailored to the handler's needs. With its massive database, it's designed to lighten employees' load and provide customers with an even faster service.

The future of chatbots in the insurance industry

Various industries, from retail to banking, are moving quickly to make the most of this constantly evolving technology. Facebook recently opened the Messenger platform to chatbots, which could have a significant impact on the insurance industry. Insurers could quickly launch automated services – from customer service and purchasing policies to claims—on a platform which already has 900 million users per month and 600 billion messages every day.

Retail, Health, IT, Entertainment, News, Real Estate, Banking, Insurance icons surround chatbot iconAs chatbot technology becomes even more sophisticated, its value to the insurance industry is likely to continue to grow. We can expect to see company's chatbots integrated across various channels of communication, providing customers with a more streamlined experience. Chatbots could ensure that human claims handlers' skills are used where they're most needed, too. By reviewing old claims, chatbots can learn to differentiate between simple claims which can be settled automatically and complex claims which need to be referred to a real person.

Chatbots could enable insurers to gather more relevant information on their customers, making it easier to offer policies with exactly the level of coverage required. More detailed information has benefits for customers as well. If an insurer has all the relevant information on a customer and what they need coverage for, there's less chance that there will be holes in their policy, or that they end up over- or under-covered. What's more, getting the right policy could mean paying the right price, rather than spending money on features which aren't needed.

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