How can AI in Insurtech enhance the process of customer service?

Last updated on April 8th, 2024 at 07:00 am

Wouldn’t it be great if every single customer who sent an insurance inquiry got full information autonomously, without the need to wait for the personal consultation? And if insurance providers get real-time data needed to prevent fraudulent activity in a blink of an eye? These goals’ achievement is much closer than we think and artificial intelligence (AI) implementation into insurance software is one of the leading drivers.

What is Going On in Insurance Customer Service

Insurance companies are changing their approach to customer service in favor of matching new standards set by global digital transformation and influenced by the global pandemic. According to a survey undertaken by McKinsey, more than 60% of senior executives across various domains are implementing automation and AI aiming to reduce physical proximity in the workplace. The insurance industry also follows the trend towards automation, especially in these areas:

• fraud detection;
• claims processing;
• risk prediction;
• smart contracts.

Сlaims management and underwriting automation technologies are the most demanded among clients. In particular, approximately 46% of AI insurance software development companies offer solutions for claims management and 43% for underwriting. Some of the companies are already using AI to automate routine applications processing and accelerate customer service. Technology like machine learning also provides opportunities for Blockchain to be used to secure transactions, detect insurance fraud and prevent risks. Insurance companies would be able to lower operational costs and therefore gain competitive advantages.

As more advanced insurance software and InsureTech solutions become more widespread, the industry is gradually becoming more efficient, accurate, and secure. Thanks to digital solutions like AI, there are countless benefits that may be extracted by insurance providers to generate a tangible business impact.

AI: How is it Changing the Insurance Industry?

Think of a situation, in which you’d contact your insurance provider. Typically as a customer, you’d be experiencing a great source of stress (whether it’s related to personal health or property damages). So when a customer calls, ensuring a positive experience would affect how smoothly the company’s business process would go. It doesn’t matter whether customers are filing claims, requesting information on policies, or renewing policies, AI is building an intelligent customized experience. Insurers who encounter situations like this more and more often, are rethinking how they approach customer service and how digitalization can help improve communication and expedite claims processing. 

E-mails, social media, and voice channels can be significantly enhanced by the implementation of chatbots while reducing the burden on human agents. AI can help automate collecting clients’ data and backup systems before passing it on to an agent, and even prepare responses for the agent to consider. Here are some top AI-driven use cases:

• instant response and direct attention to customers (24/7 access while time zones are irrelevant. 69% of consumers prefer to use chatbots so they can reach the brand significantly faster);
• automated customer claim filling and answers on FAQ’s (сhatbot finds necessary documents, videos and photos depending on the type of insurance or claim);
• personal consulting and updates (chatbot can reach out to a customer’s profile and process relevant data as requested by a particular person. This improves customer experience and provides a proactive service);
• fraud prevention (AI-powered chatbots can identify and prevent fraudulent schemes by asking for additional proof or documentation);
• cross-selling and up-selling (AI-powered recommendation engines can identify the right services and products for agents to personalize sales conversation. They can anticipate the exact moment during a conversation when a policyholder is likely to purchase something extra.)

AI-powered interactions can successfully handle the high 24/7 customer flow and allow the human employee to switch to other tasks. As a result, AI-enabled chatbots are widely used as the most effective tools to attract clients and increase their loyalty. Using chatbots at the first stage of interaction in the customer service process can help to assign queries to the correct insurance officials. 2020 NICE CXone Customer Experience (CX) Transformation Benchmark research revealed that agent-assisted methods are rapidly losing to self-service channels. The first contact resolution (FCR) rate was 55% in the first case, whereas in the second case it was 62%.

One cannot, of course, fail to mention the risk of data leaks. The data has to be consistent and reliable to predict future customer behavior and deliver an enhanced customer experience. Finding relevant data is usually time-consuming. There also has to be a pool of expertise to provide precise and timely information for the AI-driven system. To achieve this, insurers must use the latest digital technologies to provide flexibility in their data management and other systems.

Artificial Intelligence in Insurance – Future Trends

What can be expected shortly? High rates of technological progress in the industry bother 85% of insurance CEOs. This is shown by the fact that insurance companies are expected to invest in these technologies up to $3.6 billion by 2021.

Three key elements of artificial intelligence in insurance can be identified as:

1. Be careful – pay less: Internet of Things (IoT) sensors will provide personalized customer data to pricing platforms. This would make it possible to introduce a more precise insurance system for careful drivers so that they can pay less for car insurance. Insurers are looking for a balance between consistently high car accident rates and increased auto insurance rates, so now it’s mutually beneficial to motivate clients to drive more carefully. Also, leading a healthy lifestyle would be encouraged by the lower cost of health insurance.
2. All personalized: customers would be allowed to use on-demand insurance. Coverages will be customized for different cases. As AI collects a wide variety of data such as customers’ geographic location and purchase history, it would protect individuals, families, and organizations from serious or catastrophic financial loss more efficiently.
3. Customized claims settlement: AI technologies will reduce the load on human agents as well the likelihood of fraud. Voice AI can also help handle high call volumes when policyholders are calling in to understand their coverage or need to update their policy. It would also be possible to use peer-to-peer (P2P) insurance and select whose premiums will be used to pay their claims.

Conclusion

Modernizing customer service infrastructure in a traditional industry like insurance may sound like a hard nut to crack, but it’s an investment in a long-term goal. As Jay Bergman said, “In the future, insurance will buy itself automatically”. Insurance companies have no need to rely on risk pools constructed using statistical sampling anymore, and the use of big data in insurance helps a lot.  Nowadays’ tech-savvy policyholders are reasonably selective and companies are tailoring their software to customer needs. The key to building long-term relationships and increasing a customer’s lifetime value is a friendly chat between a human and a computer.