Conversational AI in Insurance: Benefits & Examples

Insurance has traditionally been a hyper-personalized industry, where consumers often expect to have a one-on-one relationship with their agent and to be treated like family if disaster strikes and they need to make a claim.

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The digital world has strained this relationship, with the vast majority of consumer interaction now taking place remotely rather than face-to-face. Customers who want reassurance might end up stuck in a hold queue for hours waiting to speak to your customer service team or left with a basic FAQ that doesn’t cover their actual issue. 

Personalization is a key challenge you need to consider. Insurers rely on personalized customer data to make decisions but often fail to practice personalization in customer service processes. 

So how can you better deal with customer service queries in a way that prioritizes personalization and provides lasting reassurance? 

Conversational AI provides the solution, giving you the benefits of centralized and automated customer service that prioritizes excellent customer experience. Conversational AI combined with Generative AI can make customer interactions more personalized and comfortable, delivering quality experiences that feel individualized and reassuring across a wide variety of contact methods. 

Interested in Conversational AI solutions for insurance? Keep reading to explore this innovative technology and how it can help your business better cater to your customers. 

What is Conversational AI in Insurance?

Conversational AI is a new evolution in AI technology that can engage customers looking for support across various channels. It is not fixed to a single platform and can field anything from telephone calls using voice-based Conversational AI to digital communications via WhatsApp or Facebook Messenger. 

Conversational AI is not a standalone technology and is best when paired with Generative AI to form a complete customer-facing AI Agent. 

In an insurance team, an AI Agent platform utilizing Conversational AI can help directly tackle many of the most common forms of customer service communications you encounter. 

Powered by Natural Language Understanding (NLU), Conversational AI can understand a user’s input, identify the intent and relevancy, and respond appropriately or take the relevant action. It’s integrated with your back-end systems and can, therefore, automatically resolve low-complexity tasks like updating a customer’s personal details in your CRM autonomously, without human agent intervention.

Conversational AI also helps you with offshore language support because it can translate in real-time, allowing you to provide 24/7 support to customers speaking a range of different languages who may be located in different time zones. 

How will Conversational AI Change Insurance?

Self-service options for consumers are becoming more common across industries, and insurance is no exception. Would-be policyholders can benefit from virtual pre-policy walkthroughs. Claimants can streamline processes via remote claims handling, including video-conferencing with claims specialists and image-based documentation provided via a customer’s mobile device. 

Automation continues to gain ground as workflows and tasks that can be facilitated with minimal human involvement help minimize back-office operational costs. Insurance customers who want to buy a policy, renew a policy, add coverage, pay a premium, or report or check the status of their claim can often do so quickly and easily by interacting with an AI Agent who will engage in conversation with them and walk them through the steps involved in any of the above scenarios. 

Conversational AI will change insurance by introducing intuitive self-service support to users, helping to restore the sense of reassurance and personalization that was intrinsic to insurance companies in the pre-internet age. 

Benefits of Conversational AI in Insurance

The advantages of Conversational AI Agents in insurance all relate directly to some of the most important aspects of your business and its growth. Insurance shares many commonalities with other sectors regarding customer service requirements, so some of these benefits are more generalized. 

Automates Laborious Processes

Every customer service process involves identification and verification to some degree. In the insurance sector, almost every customer interaction can only occur after strict verification measures – usually gathered manually by a human agent in a slow, inefficient system.

Use Conversational AI in your customer service processes to automate the majority of manual processes, from ID&V through to gathering the basic information, documents, and photos required during claim processing, etc.

For one Fortune 100 insurance company, using Conversational AI to handle ID&V allowed a single AI Agent to field up to 20 million calls annually. This saved their human employees enormous amounts of time, improved customer satisfaction, and reduced average handling times by 1.5 minutes – but more on that later when we discuss examples. 

Supports Human Agents

AI is sometimes a topic of fear for human support agents – but it shouldn’t be. In an insurance context, human employees should only be involved when required rather than wasting time reciting standard ID&V questions or performing manual checks that frustrate customers. 

Conversational AI can handle routine tasks so that human employees can focus on dealing with more complex problems, ultimately leading to higher workplace satisfaction. Because the AI fields the initial part of a customer’s inquiry, it will also provide all of the necessary information and context to your human team so that they don’t need to ask for basic verification details and the customer doesn’t have to repeat themselves. 

Engages In Proactive Customer Contact

An AI Agent isn’t solely reactive; it can also be used to reach out to customers to notify them of upcoming policy changes or renewal dates – all without incurring the kind of cost or time burdens associated with human workers. 

In many cases, using an AI Agent for this type of proactive outreach will be more effective than email marketing. If, for example, a user receives an email asking them to renew their policy, they have to navigate to a new window and re-enter their verification to act. With an AI Agent, the customer can simply accept the renewal or ask questions, and then the AI can process the payment and complete the case – all within the same channel. 

Provides Omnichannel, Omnilingual Capacity

Customers interact with businesses across various platforms – from classic telephone calls to emails, social media, and even instant messaging via WhatsApp or iMessage. 

Catering to these habits takes work. Your insurance business would need to undergo significant changes in your customer support teams to cater to these channels, which means hiring new employees, splitting existing teams, investigating each channel's safety/privacy risks, etc. 

With an AI Agent, you can almost instantaneously begin supporting your customers where they need you. The agent itself isn’t tied to any specific platform, so all you need to do is work out which ones your customers use and then work with your AI provider to marry them up. 

AI Agents don’t just accommodate for multi-channel customer habits – they also accommodate for multilingual needs in your business. Conversational AI is able to translate and reply to customers speaking other languages in a human-like fashion – which means you don’t need to offshore your customer service or invest in additional translation services. 

Use Cases of Conversational AI in Insurance

To understand how Conversational AI best fits into your business, you need to look at common use cases. Identifying the basic processes intrinsic to your business and seeing how Conversational AI can help improve them is fundamental in ensuring any potential AI adoption goes smoothly.

Here at Cognigy, our AI Agents come with pre-trained knowledge in the insurance sector and can be quickly deployed to tackle standard processes like ID&V, document collection, claims processing, and more… 

Identification and Verification 

In any insurance company, the majority of customer calls involve some form of identification and/or verification process. These processes are simplistic but take lots of time, making them inefficient and frustrating for agents and customers alike.

An AI Agent can handle many of the most laborious tasks involved in ID&V, whether running a customer through a series of basic identity questions or prompting them to upload a document used for verification. Once completed, the AI Agent can summarize the case and pass the call to your human team, which will be able to engage immediately without any need to verify the customer again. 

Realistically, the ID&V process is the best place for almost every type of business to start exploring the potential of AI. In insurance, where customer details are critical to every case, an AI Agent helps you gather all of the information you need in the fastest and most secure way. 

Automating Basic Claims

In much the same way as for ID&V, every insurance business needs to gather the necessary information associated with claims. For minor claims, involving a human agent to walk a customer through every step can be a waste of resources and frustrates customers. 

AI Agents can revolutionize how you handle basic claims. The AI agent can field the initial call or claim report from the customer, and it can also recognize their intent and begin prompting them for the information needed for your claims process. Once any administrative steps are finished, the agent can alert a human worker to take care of any complexities and complete the claim. 

For example, if a user was in a car accident and reported it to your business via WhatsApp or your website’s claims portal, an AI Agent could respond and ask them for additional details or instruct them on photographing and submitting the damage. By the time it reaches the human agent, nearly all the case details are filled in, including pictures of the damage and details. The human agent just needs to confirm everything, reassure the customer, and take care of any final steps. 

Customer Quotes

If a customer contacts you for a quote on a policy, you need to perform ID&V and gather basic information to calculate a potential figure. 

As we’ve already explained above, AI Agents can perform both of these services quickly and efficiently – but the power of Conversational AI means an agent can also be used to discuss the customer’s details, understand their query, and even interact with your backend systems in order to generate potential quotes. 

An AI Agent can automate this entire process, even when a customer accepts said quote and processes the payment. More commonly, however, insurers can configure the AI to alert human agents to either finalize the quote or negotiate with the customer.

First Notice of Loss (FNOL)

The first notice of loss call is sometimes the first time a customer ever speaks to your team. It’s a crucial step for both parties – you need to ensure you get enough details to process the case, and the customer needs to feel reassured and supported. 

As a common scenario for insurers, the first notice of loss call is a great place to start mapping AI Agent integration. The AI can answer the initial call, qualify the customer then ask them to provide the necessary information or supporting documentation, such as a photograph of damage.  

The AI Agent then passes the call, alongside a detailed case log, to your human employees who can finalize it. In the end, the AI Agent will summarize the case and file it in the appropriate system – saving your human agents from time-consuming After Call Work (ACW), reducing Not Ready Time (NRT), and ensuring lasting regulatory compliance. 

Proactive Renewals & Upsells

Though most of the benefits we’ve described have been focused on incoming customer queries, it’s worth reminding you that AI Agents can also perform proactive communications. For insurance companies, this may take the form of reminding customers when their renewal date is approaching or flagging any updates/changes that might impact customer policies. 

Because your AI Agent can interact via an omnichannel approach, customers will be able to respond and either confirm a renewal or ask questions – all without the risks associated with something like email (where customers may receive a renewal reminder, fail to click the link and then forget all about the deadline). 

Examples of Conversational AI in insurance

With such a high level of scrutiny on privacy and safety, identification & verification is crucial to every insurance business. Let’s take a look at a real-world example of how Conversational AI helped slash handling times in a Fortune 100 insurance business…

1 Agent, 20 Million Calls

A Fortune 100 insurance company had an enormous customer base that stretched across 70 countries and led to tens of millions of calls each year. Handling such a huge number of calls across multiple languages and time zones was a significant financial burden impairing growth. 

Recognizing the potential AI could have on their ID&V process, the insurer brought the use case to Cognigy. We then developed the AI Agent based on their requirements and launched it within three months. 

The impact has been staggering, with one virtual employee handling 20 million calls yearly. This represents an automation rate of around 95% – so the agent only needs to involve human agents in less than 5% of cases. This automation has slashed the insurer’s average handling time (AHT) by 1.5 minutes, reduced costs, and improved workplace satisfaction for the human customer service team. 

Read the full story here to learn more about how Conversational AI can work in real-world insurance businesses just like yours. 

Best Practices for Conversational AI in Insurance

As with any other technology adoption, there are some best practices to keep in mind if you’re considering AI in your business. Here are some suggested tips from our team – but you can always get in touch if you’d like more guidance on effective AI implementation. 

Start With a Narrow Use Case

The best way to start getting results from your AI Agent is to identify narrow use cases that represent low-complexity, high-volume problems. ID&V is the most obvious example, as most insurers need to identify or verify virtually every single customer call. 

You should then interrogate the use case further by identifying what role an AI may play, what problems it can help with, which integrations may be required, and how you’ll track progress/goals. 

Though you can easily grow an AI agent to support many different areas of your business, starting with this type of narrow use case gives you the most efficient way to deploy the AI agent and generate results in as little time as possible. 

Prepare Your Employees

Human employees don’t need to fear AI. It’s there to support them, so make sure they know that ahead of time when adopting AI and are clear about how it will specifically benefit them (not just the company overall). Spend time explaining the technology to your team and make them feel involved in the process by inviting them to share problems they may have that AI can help support with. 

Taking this time will pay off in terms of employee happiness and long-term retention. When employees are allowed to spend their time doing more meaningful work, turnover decreases, cutting rehiring and retraining costs to the bone. 

Map Your Systems

The insurance sector is risk-averse, especially when it comes to IT. Despite this attitude, your business will have a range of legacy systems and tools that play critical roles in everyday processes. You need to map out these processes ahead of time so that you know which systems your AI Agent needs to be able to integrate with, as some are more complex than others and can lead to lengthy delays. 

Cognigy Can Implement Conversational AI Solutions for Insurance

The value of Conversational AI for insurance customer service continues to expand. As NLP (Natural Language Processing) technology becomes more refined and customers become used to dealing with virtual agents and chatbots across all channels, contact centers can slowly offload repetitive tasks, allowing their CSR team to focus on more rewarding tasks.

1. In a KPMG survey of insurance CEOs, 68% of respondents said that they are focusing on customer-centric technologies like chatbots.  
2. According to NAIC, 40+ US insurers have already incorporated chatbots into their daily business processes.
3. McKinsey notes that AI and automation can reduce the cost of a customer care journey for insurers by as much as 30%. 

If you’re interested in the benefits of Conversational AI, talk to Cognigy. Our team are AI experts and can build AI Agents pre-trained in insurance, allowing you to quickly deploy an efficient automated solution that meets all of the strict privacy and security requirements mandated by the sector. 

Book your Conversational AI demo today to see how it can work for you.