AI Chatbots for Insurance: Benefits & Examples

Insurance, as an industry, is about selling reassurance to customers. In a world where people can freely browse insurer websites, investigate policies, and scrutinize reviews, you need to prioritize great customer experience (CX) or be passed over in favor of a competitor. 

Providing great CX in an era where people expect omnichannel, 24/7 availability isn’t easy – but it’s worth it. When you’re trying to grow your business and attract new customers, CX is a critical element, with almost half (46%) of insurance customers reporting that experience was their top factor for selecting a provider. After all, the services are largely the same and often nearly impossible to otherwise differentiate.

A crucial part of the CX equation is personalization. Personalizing your products based on each customer’s individual information is already fundamental to how insurers operate, but digital tools present new approaches to personalization throughout every aspect of customer interaction. 

For the modern insurer to improve conversion and retention rates, you must provide personalized customer service to customers who expect omnichannel support. Telephone calls, emails, social media, and even instant messaging all play a role in how customers speak to businesses, so you need to be present to preserve good CX. 

How can insurers provide better personalization across all of these channels in a cost-effective, scalable way? 

Enter the AI chatbot. 

What is an Insurance AI Chatbot?

The term ‘chatbot’ describes an automated bot that can field customer questions. In the pre-AI era, chatbots were heavily limited to pre-defined responses based solely on keywords, not actual language understanding, and, therefore couldn’t actually deal with the flexible nature of human language – which often led to user frustration and errors. 

Conversational AI has revolutionized ‘chatbots’, giving businesses a way to provide engaging self-service options for customers to interact with. 

How do AI chatbots work? An AI-powered chatbot leverages Conversational AI, meaning it can field customer queries through multiple channels like instant messaging or social media, understand the context of the conversation and create unique responses to help with customer problems or alert human agents if the case is too complex. Crucially, Conversational AI can also be integrated with your existing systems to grant the chatbot permission to resolve certain tasks automatically. 

For insurance businesses, AI Chatbots for Insurance can act as the first touchpoint across every customer process – from simple queries about specific policies through to personalized, bespoke guidance for complex cases such as submitting a first notice of loss.  

How are AI Chatbots Changing the Insurance Industry?

The transformation in capabilities in the leap from rule-based chatbots to AI-powered equivalents is unignorable and is shaping the face of tech adoption in the insurance sector. 83% of UK insurers reported they had either already implemented or were currently implementing AI chatbots or Generative AI to support claims.

As your industry adopts AI-powered technology at scale, you can’t afford to be left behind. Chatbots offer decreased waiting times, greater levels of personalization, and even multilingual capabilities – resulting in better customer experiences. 

In an age where customers can and will quickly switch providers if they aren’t happy with the customer experience you provide, you need to adopt AI chatbots to keep up with your competitors and meet the multichannel and multilingual needs of modern consumers.  

What Are the Pain Points of Insurance AI Chatbots?

Like all technology-based decisions in a business, there are some risks and pain points you need to account for before adopting an AI Chatbot. Working with an experienced AI provider will help mitigate many of these risks, but you should still be aware of issues such as:

Securing Integrations

Insurance businesses utilize technology in many different ways, from general tools such as CRM systems and customer service software to bespoke underwriting software. For your AI chatbot to be as effective as possible, you need to scope which integrations it will need – as each may add to the complexity and time associated with developing and deploying the bot. 

Misunderstanding Technical Requirements

Some insurers hesitate to adopt AI technology as they fear that operating and overseeing the bot means they’ll need high levels of technical expertise in their internal teams. 

A skilled AI provider handles all of the technical aspects of your chatbot's design, deployment and maintenance. Your own team doesn’t need any technical expertise to oversee the chatbot’s day-to-day activities – so you’ll actually save money by improving customer service processes without needing to recruit or reallocate technical resources. 

Data Privacy & Compliance 

Insurance is a tightly regulated industry where keeping customer data private and secure is paramount to success. Some insurers fear that the flexibility and utility of AI means technology may lead to data risks, but the opposite is actually true: well-implemented AI chatbots actually protect customer privacy. 

If you’re concerned about data privacy and AI, talk to Cognigy. Our team is made up of experts in AI within the insurance sector, and we can help walk you through any concerns and demonstrate how AI-powered chatbots can protect your business rather than pose risks, as we’ve done with global insurance companies already. 

Benefits of Insurance AI chatbots

Why is AI adoption so high in the insurance sector? It’s not just about matching what your competitors are doing – it’s about exploring the compelling benefits that are unique to AI Chatbots in comparison to any other available technology. 

Offer Omnichannel Service

82% of consumers expect multi-channel interactions from insurance providers. Customers want to be able to ask questions or resolve problems through digital channels, all without the delays and frustration that can come with traditional customer service phone calls.

An AI Chatbot allows you to offer a flexible self-service option that can be interacted with across multiple channels/platforms. Unlike older chatbots tied to a webchat window on your website, AI chatbots can exist simultaneously across WhatsApp, iMessage, Webchat, social media, and more, which means customers can pursue self-service journeys using their preferred approach. 

Improve Employee Satisfaction

AI Chatbots can automate low-complexity tasks that greatly burden your human customer service team’s time. Extracting customer details for identification or verification, for example, can take up valuable minutes and must happen at the start of every single interaction. 

If a customer interacts with your AI Chatbot, it will extract all of this information and either resolve the problem itself or alert a human worker. When the human gets involved, the AI Agent platform supplies all of the pre-requisite information about the customer and the case so they don’t need to repeat details, and the human agent can focus on solving the problem. 

This results in a more productive workflow for your human agents, who will be supported by Agent Assist AI rather than threatened by it. 

Enable Intuitive Self-service

In the past, self-service was reserved for the most basic inquiries and relied on pre-defined responses. AI chatbots grant a whole new level of self-service capabilities due to Conversational AI’s ability to understand language and interpret context and intent. 

Depending on the query, the chatbot can either converse with the user to extract additional details (such as in a quote request) or actually interact with backend systems to resolve problems (e.g., looking up details on a customer’s policy). 

All of this means the customer can get more done via self-service, which means they don’t need to pick up the phone and call your team. This has the dual benefit of improving customer satisfaction and alleviating resource drain on your human agents. 

Simplify Claim Processing

The process behind submitting a claim or querying ongoing claims is often complex and distressing to a user. Rather than having to call your human contact center team, potentially wait on hold, and then even have to call back at a later date, AI Chatbots provide an instant way to guide customers through each step in a claims process. 

The chatbot will ensure it extracts whatever information is needed and will guide users through the process, even facilitating actions like submitting a photograph of damages to support a claim. The Chatbot can do all of this in the same interface, reducing friction and ensuring the customer provides adequate levels of detail. 

By breaking things down step-by-step and acting as a guide, the AI Chatbot will collect all necessary information and relevant documentation, minimize the risk of claims going wrong, and provide personalized customer support. 

Offer 24/7 Multilingual Support

Traditionally, servicing customers in multiple countries meant recruiting expensive translation services or investing in offshore contact centers. AI Chatbots powered by Conversational and Generative AI instantly provide multilingual capacity without the same investment. They are capable of translating customer input and providing realistic responses via text or even voice chat. 

Additionally, AI Chatbots don’t need to conform to your office hours and can be available 24/7 to serve customers across time zones. They provide immediate assistance to customers no matter where they are. 

Thanks to these capabilities, customers can complete self-service actions when it suits them best and in their native tongue – further increasing the likelihood of positive customer experiences. 

Use Cases of Insurance AI Chatbots

We can’t discuss the benefits of AI Chatbots without looking at real-world use cases. By identifying the role an AI Chatbot can play in your most common customer service processes, you can start to see the true value of automation and how it may benefit every aspect of your business. 

Identification & Verification

Though ID&V is a common process shared by many industries, insurers have to make it a mandatory part of virtually every customer call. Whether you’re asking customers for personal details to confirm their identity or retrieving policy numbers or ID documents, almost all of your customer journeys include ID&V. 

An AI Chatbot is capable of handling practically all of your ID&V requirements. An AI Agent powered by Conversational and Generative AI can extract all of the necessary information from customers, compare it to backend systems, and confirm any required details. It can then either handle the case itself or pass it to an agent, who won’t have to perform further verification as the bot will supply all of the prerequisite information. 

In most cases it is ID&V where AI Chatbots stand to offer the biggest benefits in terms of cost savings and even employee satisfaction. By taking care of this low-complexity task, the AI frees your human agents and allows them to focus on more challenging problems. 

First Notice of Loss

Having customers report a first notice of loss and provide the right level of detail to progress their claim is important – but it’s also a process that can lead to frustration if the customer has to wait on hold to speak to an agent. An AI Chatbot could be deployed as the first point of contact for customers reporting a First Notice of Loss, giving them an intuitive and accessible way to report the damages. 

The AI Chatbot would identify the customer, verify their details, request information about the case, and even provide a means for them to submit photographs or additional documentation. It would then summarize the case and handover to a human agent to finalize the process. 

Automated Information Gathering

Often, the simplest implementations of AI are some of the most time-saving. In a world where you use an AI Chatbot to allow customers to report losses or start claims, you can help provide additional support and reassurance by utilizing AI to make information gathering easier. 

For example, a customer can send a photograph of their license plate, and the AI can automatically detect it, or the bot can ask the user to share their location so you can organize for effective roadside assistance. 

Automatically collecting this type of information instead of making customers repeat it manually means you’re minimizing friction for users, many of whom will be distressed following an accident. By doing this, you can give customers the reassurance they require from their insurance provider and improve overall customer experience. 

Coverage Queries/FAQs

How much time do your human agents spend on the phone answering questions that customers could find the answer to online? Despite some insurance providers investing in onsite FAQs and blog content, customers still feel the need to contact your business because they don’t want a standardized, one-size-fits-all solution. 

AI Chatbots can field coverage queries in a way that feels more personal. A customer can ask the AI Chatbot questions and receive near-instantaneous answers in a one-to-one dialogue. The information, though it may be pulled from a standardized source like your FAQs, will be delivered in a way that mimics real conversations – so the customer feels far more supported than they would if your human agent told them to go and read an FAQ on your site.

Examples of AI Chatbots in Insurance

If use cases aren’t enough to demonstrate the value of Conversational AI Solutions for insurance, let’s look at a real-world example…

For a Fortune 100 insurance company that became a Cognigy.AI client, the ID&V process was eating up hours of agent time and represented a burden on resources and morale – customer service employees wanted to spend their time on productive problem-solving rather than multiple rounds of laborious ID processes. 

Introducing an AI Agent solely responsible for tackling the identification part of the call completely transformed the customer service experience of both customers and workers alike. Now handling up to 20 million calls annually, the AI Chatbot has achieved a 95% automation rate for ID&V and reduced Average Handling Time (AHT) by 1.5 minutes. 

Once the caller is identified, the AI passes it to a human agent who can focus on the more engaging part of the problem– this has not only led to massive time savings, but also considerable improvements in agent satisfaction and huge cost savings. 

To learn more about how an AI Chatbot may tackle problems in your own business, read the full story here. 

Best practices for AI chatbots in insurance

Whatever technology you plan to adopt in a business, you need to take some careful first steps before you dive in headfirst. AI Chatbots are no exception, and you need to bear a few guidelines in mind so you can make sure it goes as smoothly as possible. 

Identify Customer Browsing Habits

To make your chatbot as effective as possible, it should be available where customers actually want to interact. Creating a chatbot panel on your website isn’t going to offer value if 90% of your customers enquire using your WhatsApp support number. 

Spend time mapping out what devices and tools your customers currently use to contact you, and even consider sending out a survey to determine if you’re failing to offer support where they want it most. 

Considering roughly half of the world’s web traffic comes through mobile browsing, it pays to use an AI Chatbot provider that can integrate with WhatsApp, iMessage, SMS, and other mobile-first approaches. 

Evolve Your ‘Chatbot’ Associations

Originally, chatbots were so limited by pre-defined responses that they tarnished themselves in many businesses' eyes. If you’ve ever invested in a chatbot only to see it fail to meet your expectations, you’re not alone – but it’s time to move on and embrace the fact that an AI Agent is a complete revolution on what we once called a ‘chatbot’. 

Despite the title of this article, it’s probably better to forget about ‘chatbot’ as a term entirely. Think of your AI Agent as a flexible digital assistant accessible through whichever channels your customers need, rather than a fixed ‘bot’ that can only interact in a predetermined way. 

Optimize & Improve

The true beauty of AI is that it grows with your business. As your AI Agent engages in customer contact, it will record conversations and file information, growing and evolving to better understand the context and intent behind every interaction. 

Not only will this help the AI Agent evolve, but it will also serve to benefit your wider business by providing you with detailed insight for every customer. From identifying common queries to creating new FAQs through to sentiment analysis, you can review and analyze AI Chatbot data to help shape business decisions and direct growth. 

Cognigy Can Implement an AI Chatbot Solution for the Insurance Sector

Want to know more about how an AI Chatbot can augment your business? 

At Cognigy, we are experts in AI for the insurance sector and can build AI Agents pre-trained in insurance-specific terminology and common processes to help you get ahead of your competitors and begin better serving customers from day one. 

Book a Conversational AI demo today to see how AI Agents can work for you.