Chatbots for the Insurance Industry

Last Updated on October 28, 2020 by Sean B

The idea of you talking to an automated insurer must have been difficult to digest if it was a decade ago. But using chatbots for the insurance industry is quickly becoming the norm. Insurance chatbots can save both the insured and the company insuring them both time and money.

Chatbots are adding innovation to the insurance industry, besides customer service. chatbots are known as the best customer service representatives that need no rest and break. They can work for 24 hours a day to assist the customers with their queries and complaints.

In the insurance industry, chatbots are famous as customer-facing representatives that can provide 24/7 customer service, immediate cover, and personalized quotes to each customer. In short, they put the burden off the customer management team and allows the insurance company to focus on new processes and main claims.

For insurance customers, chatbots for the insurance industry are nothing but a great development- a technology that extends the customer service hours while providing the right quote and information about any product to the customers instantly. As chatbots for the insurance industry provide seamless services and the right quote to every customer, they are regarded as one of the most essential elements in the firms.

The chatbots for the insurance industry contact the insurance customers through their favorite social media messaging apps or even through websites. They do not even have to call the company to receive information that an insurance chatbot can give them online.

As for insurers, they are liking the insurance chatbots so far. Chatbots for the insurance industry are integrated with pre-defined conditions and backend systems to streamline processes, advance the process of managing claims and creating ticket claims.

Insurance industry chatbots are a cheaper and effective solution for insurance firms as compared to a standalone bespoken insurance software.

Usually, insurance chatbots are operated via websites, social media messaging apps, within the company’s internal communication system, and via mail to assist the insurance customers.

A new car in a parking lot.

Why Use a Chatbot for the Insurance Industry?

Humans of today have substituted verbal communication with written communication. People text a lot. Since the invention of smartphones, they want to find every piece of information on the internet. They do not want to waste their time calling an insurance agent when they can get the exact info by sending one message to an insurance chatbot.

Humans have been talking to chatbots and machines for a very long time now. We do not need to visit an insurance firm for a travel cover when we can visit an insurance website on our phone and get all the information we need by a tap on the phone.

The best way for insurance chatbots to engage with customers is through text. We have been talking to virtual assistants for a long time now. Why not use traditional methods of business communication such as emails, to convey all the information that a customer wants.

Not only does it streamline all the insurance processes but also enhances the user experience of potential customers. The better the customer service, the merrier your customers.

Top Use Cases of Insurance Chatbots

Insurance chatbots are not luxury add-ons for an insurance company. They are an effective yet cost-effective solution for insurance firms to improve their customer services while streamlining their insurance processes.

Insurance is often seen as evil. Not many customers are happy dealing with them even though they are satisfied with the insurance policy. The digital global shift no longer allows any company to control where their customers are getting all the information from. If your customers prefer getting all the info through your website, using an insurance chatbot, so be it. The insurance companies must provide speedy digital services to their customers to stay in the competition.

On the other hand, insurance firms have stiff competition with policymakers as well as banks. According to Accenture’s research, 60% of the people are willing to buy an insurance policy from a bank or a non-insurance company. Moreover, 29% of the people are willing to buy an insurance policy from online firms such as Google or Amazon.

So, it’s pretty much clear that the integration of insurance chatbot is necessary for every insurance company that wants to stay in the competition.

Here are the top use-cases of chatbots for the insurance industry:

Answer Frequently Asked Questions

Insurance companies are perfect candidates that require the integration of a chatbot on their websites to answer commonly asked questions. When it comes to the insurance industry, so many conditions, policies and plans are laid out and often standardized for legal reasons. A customer needs to know of these conditions, policies and layouts before proceeding with buying one.

An insurance chatbot can work 24/7 as an automated customer service representative to answer questions covering documentation, premium plans, coverage plans, and insurance coverage for white-collar workers. In addition to that, the chatbots for the insurance industry have the necessary abilities to renew insurance policies, perform customer on-boarding and carry out customer billing.

As of a study published in 2019, it was seen that 73% of insurance companies and banks reported a 20% increase in the number of interactions as well as customers that they were able to handle, all thanks to insurance chatbots.

A father beside his son in a Hospital Bed.

Assist the Insurance Customers as well as Insurers with Various Issues

Insurance chatbots provide effective and first-tier support to the insurance customers as well as insurers. For instance, if a customer wants to fill the travel insurance/coverage form but is having trouble, an insurance chatbot can help him out. It does not always need to be a human representative. The chatbot either draws answers from standard information or pass useful links to the customers to help them out.

Insurance chatbots are also used as a way to connect to higher-level support. For instance, if they cannot solve an issue or find a relevant answer, they put the customers through to the flesh and blood representatives for a better communication connection. Therefore, the agent assists the customer by using other advanced options such as co-browsing.

Manage Claims

It is reported that claim processing is the least digitally-advanced function for car and home insurers. Insurance chatbots allow the policymakers and insurers to make claim proceedings smoother for the clients. Whenever a customer needs a claim, he can do it instantly at any hour, using an insurance chatbot. However, the chatbots are not advanced enough to process the claim all by themselves. That’s why they send the claim requests to higher-level support.

Using chatbots for the insurance industry reduces the claim processing time. As a result, an insurance organization can handle a large number of claim filings. Chatbots are necessary to assist when customers cannot get hold of call center agents.

One example of an insurance chatbot is ZARA, launched in the year 2018. It was integrated into the official website and various messaging apps by Zurich, UK. The utmost goal of this approach was to improve claim processes and reduce processing time. Zara, the insurance chatbot was able to help millions of people in filing insurance claims.

Offer Personalized Quotes and Suggestions to the Customers

Chatbots for the Insurance Industry use natural language processing and analytics to know about your audience. It means that they will be able to predict a customer’s behavior and identify the personalized service that he needs. This helps the insurance companies to recommend their services while generating qualified leads and upselling insurance opportunities to the customers.

Some chatbots for the insurance industry can perform automated underwriting. For instance, if a customer wants to buy a travel insurance package, the bot will ask him a series of questions before it can come up with a personalized insurance policy package for him. This feature allows the insurers to offer insurance policies that best suit the need of the customers.

In addition to that, chatbots for the insurance industry also help the customers to get premium quotes instantly.

But the real question is, will the customers trust an insurance chatbot with such an important product? The answer is yes. According to research, 74% of the people have no problem interacting with an insurance chatbot to know about types of insurance policies or to buy one. While 68% of the people are ready to take planning advice from bots, 78% of the people think that advice coming from a bot about asset investment and allocation is wise and worth-accepting.

Besides, we are more than happy to mention real-life insurance chatbot examples. The leading insurance company of Ireland, AA Ireland increased the conversion rate by 11% and decreased customer handling by 40%, all thanks to their integrated insurance chatbot.

Send Important Notifications

Insurance customers want relevant alerts and notification from their insurers. For instance, if you run a home insurance company, 68% of the customers will want you to alert them about potential natural hazards, house fires, and accidents. When it comes to operating a car insurance company, 64% of the customers will want you to send danger alerts whenever they take dangerous driving routes.

While sending alerts and notifications might be a little hard for a customer representative, the insurance chatbots can do it perfectly well. If an insurance company integrated its chatbot with different messaging apps, it will be easier for them to alert their insurance customers with important information regarding their property.

Other useful alerts and notifications that a chatbot can send are renewal reminders, terms, conditions, and guidance manual.

A woman filling out a Life Insurance form.

Guidelines to Follow When Integrating a Chatbot for the Insurance Industry?

If you want to give chatbot to enhance the customer experience with your insurance company, consider the following factors:

Software

You need a platform (messaging app or official website) to make your bot an effective communication tool. In addition to that, you need smart ways to build conversation sequences and publish them online for exceptional user experience and interface. To power up your insurance chatbot’s intelligence, you need a viable platform to get the insurance chatbot working non-stop.

Smart Insurance Solutions

Prioritize solutions as per your customers’ needs. Before Zurich UK launched their insurance chatbot, ZARA they found out that online or automated claim processing was in high demand from the customer side. That’s why, the company focused on one aspect and kept working to reduce the claim filing and processing time by the use of their exceptional insurance chatbot, ZARA.

Your area of improvement can be different too. However, you would have to collaborate with your customers as well as internal teams to pull the efforts.

Chatbot Scripts

The better the scripts, the better your bot’s ability to answer customers’ questions. Pleasant interactions with your insurance chatbot are necessary when it comes to expanding your insurance business.

In addition to chatbot scripts, do not forget to add a personalized touch to your chatbot so the conversations with the customers are lively, engaging and interactive.

Feedback

Feedback is an important stage to improve the functionality of your website. Your insurance chatbot will go through the refining and testing phase. Keep your eyes open on the feedback from the insurance customers. Observe and see what they would like to improve in the chatbot interaction. AI-powered chatbots for the insurance industry are re-programmable and has the ability to improve and learn via customer interactions.

4 Challenges Faced by Customers When Interacting With Insurance Chatbots

  • Consumers hesitate to trust an insurance company’s chatbot in serious matters like quotes, policy details, and pricing
  • Most of the customers do not understand the value of an insurance chatbot
  • The customers’ communication preferences change instantly- leaving the whole industry vulnerable and unstable in communication processes
  • Filing claims, processing them, renewing your insurance policy, and buying an insurance plan are complicated processes, thereby, needing a lot of attention from a human customer service representative

Closing Thoughts

When insurance companies think about integrating a chatbot, they are not thinking to replace their customer representatives. Instead, what they do is make their support team more efficient with the use of a chatbot. The use of chatbots for the insurance industry is so common that most of the insurance companies all across the globe have a smart online presence.

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2 thoughts on “Chatbots for the Insurance Industry”

  1. Hi Sean,

    This is very interesting. I have definitely interacted with many chatbots through insurance companies and lots of other companies in general, but never really stopped and thought about it too much – it’s just something I’ve apparently gotten used to.

    I get how chatbots save these companies so much money, but I’m not sure that those companies are putting that money back into making better policies and better coverage for their clients – hopefully they are, or they’re spending it on paying their employees better, but I can’t help but feel like they might just be enjoying the extra profit. (I’m not the biggest fan of insurance companies, if you can’t tell.)

    I do think that they are a great way for small businesses to save money, though they can be a bit annoying to deal with if you have a complicated question. It’s still a million times better than dealing with an automated phone menu, though, so I’ll take them.

    Reply
    • Jade,

      Thanks for the comment, and I think you’re right. Even though the chatbots are saving the companies money, I don’t think that money is going back into improving their products and services. Such is the way of corporate greed though, odds are the money is making its way into the pockets of the top executives and investors.

      As for the annoyance, a well done chatbot can be a great experience for customers. The problem comes when a company goes into the development process without a complete plan.

      Sean

      Reply

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