Beyond Automation: How insurance chatbots can provide a conversational experience

Manual processes, legacy systems, an aging population, and fraud detection. These are only some of the contributors to the current challenges insurance companies are facing.

But what can help insurance providers overcome these obstacles?

Chatbots are one of the most used technologies in modern-day CX. Some of the most renowned brands, including Nationwide, Progressive, and Allianz, use chatbots in their everyday customer communication and have seen striking returns.

As AI continues to develop, so will the insurance industry. In fact, the global artificial intelligence in insurance market size is expected to be worth nearly $80 billion by 2031. And McKinsey predicts that because of such developments, insurance will shift from its current state of “detect and repair” to “predict and prevent.”

The introduction of conversational and generative AI has enabled chatbots to create new content through text, videos, images, and audio and share it through human-like conversation. Now insurance companies can deploy virtual assistants that complete entire processes from marketing and sales to support, rather than a chatbot built only to answer common questions.

Let’s explore the many ways insurance companies can benefit from AI-powered chatbots – and maybe you’ll find the missing piece to your own communication strategy along the way.

Whether customers want to learn more about what you have to offer, process a claim, renew a policy, or pay an outstanding balance – an insurance chatbot provides automated, always-on service from discovery to retention.

New and longtime customers can benefit from an insurance chatbot since it can be programmed to:

Powering your insurance chatbot with AI technology enables you to set up a virtual assistant to market, sell, and support customers faster and more accurately. For example, if a customer wants to renew their policy, your chatbot can see their loyalty status and apply discounts they might qualify for. It can also upsell other packages, share the appropriate details, and connect the customer to an agent or add them to your sales funnel.

And if you’re worried that an automated assistant might seem cold and impersonal, think again. Built on the right platform, your insurance chatbot can tailor any interaction based on a customer’s brand loyalty, demographics, previous purchases, conversation history, and more. 

When building a chatbot, you can choose between: 

AI chatbots and assistants offer more advanced capabilities regarding natural language understanding, personalization, and handling complex tasks than keyword chatbots. While keyword chatbots may be suitable for handling simple queries and providing basic information, AI chatbots deliver a more intelligent and personalized customer experience in the insurance industry. That’s because they’re powered by machine-learning technology that makes them smarter with each interaction – helping cover the wide range of services and queries your customers present. 

However, the choice between AI and keyword chatbots ultimately depends on your business needs and objectives. 

Regardless of which technology you choose to power your chatbot, automating any part of your journey will improve your business in the long run. But insurance companies looking to provide a conversational customer experience benefit most from AI chatbots. Here are just a few of the key advantages:

Chatbot automation enables you to offer 24/7 support to customers. It also reduces response times when customers ask about your policies, file a claim, report changes, or schedule appointments. All while personalizing each interaction.

AI chatbots already know details such as a customer’s name, their policy details, and previous claims, making it easy to resolve their queries quickly without having the customer repeat information. They can also communicate through images, videos, and documents. Imagine a customer sending a picture of their car damages after an accident and your chatbot giving them a quote within minutes – that is the real power of AI in insurance. 

Chatbots benefit more than just your customers, though. They can free your customer service agents of repetitive tasks such as answering FAQs, guiding them through online forms, and processing simple claims. This leaves agents with more time to handle complex cases. As a result, you can offload from your call center, resulting in more workforce efficiency and lower costs for your business. 

Another benefit of using chatbots in insurance is engaging potential customers proactively. Your chatbot can answer pre-sale questions such as explaining coverage options, providing quotes, and connecting customers with an agent best fit to assist them further. Connecting your insurance chatbot to the right platform enables it to funnel prospects into your lead pipeline once they collect enough information.

Conversational customer experience encompasses much more than providing quick answers to common questions. Customers want personalized service if they plan on being loyal to your brand.

AI chatbots are equipped with machine learning algorithms that can analyze customer data and preferences to offer personalized insurance recommendations. By understanding customers’ individual needs, chatbots can suggest the most suitable insurance products, such as life insurance for young families or promoting travel insurance to frequent flyers. Thereby increasing the chances of conversion. They can even recognize customer loyalty and apply discounts to purchases and renewals.

Insurance claims are one of the most tedious processes for brokers and customers. Using chatbots in insurance can streamline the claims process by guiding customers through the necessary steps and documentation. From reporting a car accident to submitting a health insurance claim or tracking the status of a claim – chatbots can provide real-time updates, reducing the need for customers to follow up with representatives manually.

AI-powered chatbots can act as the forefront security for insurance companies by analyzing claims data, verifying policyholder information, and preventing fraudulent submissions.

Insurance chatbots powered by generative AI can monitor and flag suspicious activity, helping insurers mitigate risk and minimize financial losses. Since they can analyze large volumes of data faster than humans, they can detect well-hidden threats, breach risks, phishing and smishing attempts, and more.

As mentioned earlier, AI chatbots learn over time. They gather valuable data from customer interactions, which can be analyzed to gain insight into customer behavior, preferences, and pain points. This data-driven approach helps insurance companies refine their products and services to meet customer needs better and stay ahead of the competition.

Understanding how chatbots work and what they can do is one thing. But let’s look at some real-life examples of how chatbots have helped insurance companies across industries introduce conversational customer experiences:

Geico introduced its virtual assistant, Kate, to answer questions about quotes, policies, claim handling, or general insurance within its mobile app. It’s also programmed to direct customers to parts of its website or mobile app pages, help them find their ID card, or answer billing questions when they log in. With multi-platform access, Geico’s chatbot makes it easy for customers to get the information they need without speaking to a live agent.

Another example is LAQO, a fully digital insurance company that implemented an AI-powered chatbot, Pavle, on WhatsApp to improve customer service. Now, 30% of queries are handled by the chatbot, of which 90% are resolved within 3 to 5 messages.

Aetna’s chatbot, Ann, lives on its website and offers 24-hour support for new members and existing customers trying to log in. Powered by natural language processing, Ann mimics the look and voice of a human to give customers a friendly response. As a result, Aetna’s website experience has improved, and phone calls to its call center have declined by 29%.

Lemonade, a disruptor in the insurance industry with a digital-first approach, introduced several chatbots as a part of its business model: 

Each of these chatbots, with its specific goal, helps customers and employees through conversation – collecting internal and external data that allow it to make decisions and respond appropriately.  

Maya and Jim’s ability to complete processes has eliminated the need for paperwork and has shortened Lemonade’s payout time. Maya ensures customers are paid within 3 minutes and insured within 90 seconds. While Jim handles over 20,000 claims a year with no human commitment. After interacting with the two chatbots, Lemonade customers are happy with their conversational experience, with a satisfaction score of 4.53 out of 5 stars. 

AI chatbots are changing the insurance industry. Companies embracing this new technology can offer innovative solutions to improve customer experience, streamline operations, and mitigate risks.

Here are some of the most relevant chatbot trends for insurance companies: 

Chatbot technology is ever-evolving. Which is why it’s important to have an adaptable and scalable solution that can help you implement the most relevant technology. Deploying a chatbot on multiple channels, implementing new features and functionalities, and testing out new use cases are all part of providing a revenue-driving chatbot experience. Working with an easy-to-use platform and industry experts takes the guesswork out of actioning these changes – and saves you and your teams time and money in the long run. 

Chatbots in insurance are here to stay. The positive outcomes they’ve brought to insurance companies and policyholders are immeasurable – turning long, tedious processes into fast, pain-free experiences. 

Onboarding new customers, collecting documents and claims, offering 24/7 assistance, and automating policy renewal processes are only some ways that insurance chatbots help reduce costs and improve customer satisfaction. Powered by AI technology, insurance chatbots can provide a human-like, conversational experience where they can market, sell, and support customers – offloading tasks from your customer service agents and increasing workflow efficiency. 

Like any new and developing technology, finding the right solution that fits your business needs is essential. Leaning into expert advice and easy-to-use platforms are the recipe for successful chatbot implementation. Which is why choosing a solution that comes with a professional team to help tailor your chatbot to your business objectives can serve as a competitive advantage.