Chatbots have a way of engaging customers in a friendly way. They can be used to position relevant insurance products as a part of their ongoing conversation. Since chatbots can potentially reach an unlimited number of customers in one go, this means of communication slash the marketing costs for insurance companies.

1. Chatbots In Insurance : Your Friendly Virtual Agents
The insurance industry is usually associated with lengthy form-filling, elaborate questionnaires, time-
consuming background checks, shortage of staff, and a cumbersome customer service. Global
consumers trust the insurance industry less than they trust supermarkets, banks and car
manufacturers, according to a new survey from Ernst & Young. With the limitless possibilities of
innovation Artificial Intelligence now has to offer, insurance companies find themselves in the fray to
win customers. And, like a phoenix rising from the ashes, insurance industry is adopting chatbots
powered by Artificial Intelligence to stay in the game.
What’s a chatbot?
It is a software program that interacts with customers using voice or text, interpreting their
queries using Artificial Intelligence. A chatbot is a smooth operator: efficient, consistent, tireless,
and available 24X7. It can interface several customers at once without missing a beat. Today, a
customer typically has to wait on the phone, or put several details together in an email to get the
simplest of queries answered. But with chatbots, she can instead interact with the friendly
neighbourhood bot which can resolve her queries in a split-second.
How are they relevant to insurance companies?
Millennials make a big piece of the potential-customer-pie:
According to a survey by Swiss Re, US consumers under age 44 are more than twice likely to buy life
insurance on the internet than those over 65.
And, since millennials are dependent on smartphone for everything from texting friends to
buying financial products, it is in fact, best to reach them at places where they inhabit – their
messaging apps. Recently, in an act that brings its users closer to companies through
conversational commerce, Facebook has opened up its Messenger app to chatbots. Customers
can now talk to a chatbot from their favourite messaging app.
Insurance companies involve repetitive, time-consuming, and lengthy
questionnaires:
Chatbots have a way of engaging customers by texting them little snippets in response to
questions soliciting to-the-point answers. They avoid redundancy as they can quickly connect the
dots of data they collect from the customer to arrive at the risk profile. Chatbot avatars have a
way of making the conversation very personal and friendly, so the customer almost enjoys the
experience.
Customers expect an on-going communication from insurance companies:
According to a study by EY.com, customers of insurance companies world over want more frequent,
meaningful and personalized communications.
This is best facilitated by chatbots who can make conversations with the customer from time to
time, ranging from wishing him on his birthday to arranging relevant assistance during accidents.
Customers find the fine print of insurance lengthy, arcane and almost
intimidating:
Chatbots help share the same information in digestible chunks and make insurance something
easy to deal with. In turn, the insurance companies gain the trust from the customers.
How an insurance company benefits out of chatbots:
Bringing in new customers:
According to Forbes, 70% of people are now buying insurance on the phone.
Each time a customer visits the website of the insurance company, the chatbot can talk with him
about what he is looking for and make it exceedingly easy to position a relevant product. It can
fetch a quote for what he is interested in with no time to lose. A virtual assistant doubling as an
insurance agent simplifies the obscure aspects of insurance to a great extent.
In their marketing efforts:
Chatbots have a way of engaging customers in a friendly way. They can be used to position
relevant insurance products as a part of their ongoing conversation. Since chatbots can
potentially reach an unlimited number of customers in one go, this means of communication
slashes the marketing costs for insurance companies. That the customers are more likely to pay
attention to a chatbot also implies more conversions. The exercise also reinforces a positive
image of the brand in the customer’s mind.
To process claims:
Think of all the data that needs to be gathered, carried and submitted to an insurance agent.
Chatbots make it a breeze to collate and process all the information. Lemonade Insurance
Company has recently used its claims-bot to process a claim in just three seconds, with zero
paperwork. It also used its algorithms to run a speedy fraud-detection check. Chatbots even
facilitate the process by suggesting the fastest way to reach the insured.
For customer service:
A chatbot answers customers questions in the simplest language possible. In case a chatbot is
not able to interpret a customer’s question using its algorithm, it can connect him to a customer
service agent seamlessly. For the customer who has a ton of things on his mind, insurance is
usually not at the top of the list. Moreover, he’s likely to have home, travel, car, and health
insurance and it takes time and effort to stay on top of them. To ensure that he doesn’t miss
payment of premium and go through the hassle of renewing his policy, chatbots can remind him
in time. In fact, chatbots are so reliable that in case of impending storm, they offer advice about
how to submit a claim. In so doing, imagine the reach a chatbot can have!
Insurance companies, don’t miss the big opportunity!
According to a report by PwC, “Social and technological trends, which shifted customer needs and
expectations, are a source of opportunity for tech-savvy insurers. Those market players who have been
taking action and adapting their offerings to changing client demands will at least maintain their
market position.”
Providing innovative solutions using Artificial Intelligence (AI) throws up a big opportunity for
insurance companies that want to increase their market share by giving them competitive
advantage. The corollary holds true, too: Insurance companies who will not take advantage
technology will miss out on a customer base that is eager to get insured. So, companies need to
take a deep and strategic approach to drastically change the their operational efficiencies. Those
who automate customer-facing roles, underwriting and claims processing are likely to emerge as
the market leaders. And those who use reliable algorithms to identify potential fraud will have
better profit margins as they would be able to offer a more risk-aware underwriting.
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