Insurance Chatbots (5 Benefits & 3 Use Cases)

Conversational AI is everywhere nowadays, from your bank’s chatbot, Siri, or Google Assistant on your phone, to stores or even utility companies. Everyone is trying to maximize their service capacity and speed by beginning and managing as many conversations as possible using AI. Insurance companies have the same opportunity as providers of products and services in that building a great customer experience increasingly influences retention. But, also like other service industries, they are under constant pressure to reduce expenses and gain maximum value from their most valuable assets, their people.

The needs and gaps in experience aren’t news to insurance companies, but they’re similarly challenged to resource multi-year technology projects, with immediate pressure to improve service and still reduce costs. It is no surprise that the insurance industry’s use of chatbots has grown over the past several years.

This guide focuses on the value of chatbots for insurance. It covers where they are best positioned to offer strategic value for both customer experience and operational efficiency and explains why. This guide also addresses incorporating chatbots into a carrier’s overall customer experience strategy.

What Is an Insurance Chatbot?

A chatbot is software that simulates a conversation with people using unstructured dialogue, and most typically sits on a designated page like an enterprise’s support knowledge base.

An insurance chatbot streamlines simple customer interactions, using natural language to answer questions and avoid customers having to sort through huge volumes of information or choose from pre-selected and restrictive sets of answers.

A chatbot is an application of machine learning that leverages historical dialogue data and consequently is more powerful and adaptable than software built with rigid and traditional software logic. This increased flexibility can help policyholders do everything from learning more about their insurance and selected benefits to submitting a claim and checking its status.

5 Insurance Chatbot Benefits

An insurance chatbot offers considerable benefits to both a carrier and its customers by joining the flexibility of conversational AI and the scalability of automation. It is key to recognize that a chatbot is one of multiple channels for a company to open to expand the options available to speak with their customers in the manner and method they desire.

A chatbot can help make the complex simple. People can perceive the insurance sector as being challenging to understand when they are reading through lengthy quotes and policy documents striving to understand what is and is not covered. The claim experience can feel long and lack transparency.

With chatbots, consumers and business owners enjoy a more streamlined and seamless interaction with their carrier. Whether a customer is shopping for a new policy or in search of a better price, onboarding to understand their benefits, inquiring about their policy, or filing a claim, there are opportunities to ask quick questions and get quick answers. Insurance firms can realize improvements that include more productive employees, more efficient operations with lower operating expenses, and greater customer satisfaction.

By using chatbots to streamline insurance conversations, your company can elevate and optimize processes across the entire insurance business.

1. Provide 24/7 Support to All-Customers, Prospects, and more

Insurance has always been a 24/7 industry because accidents and questions don’t arise only during business hours. Carriers have leveraged call centers for decades to intake and triage claims, dispatching adjusters to get to the scene of late-night emergencies. They have steadily expanded the scope of always-on telephonic service to include options like providing quotes, processing policy changes, accepting payments, and supporting the agents and brokers selling and servicing their products. Now as digital journeys encroach on some of those existing voice services for other industries, like the retail industry, so consumers’ expectations for digital self-service have evolved too. The internet changed service expectations for every industry, including insurance.

Chatbots help insurance enterprises meet today’s service expectations. Conversational AI can be responsive at all hours but also manage a conversation with a potential customer, identify intent, offer product options, and even initiate a quote. Conversational AI can provide a recommendation based on a prospect or customer’s responses and help them to compare plans, answer follow-up questions, and then facilitate connecting them with a salesperson or agent when necessary.

For existing customers who need clarity on their policies, chatbots can answer simple coverage questions, resolve basic queries, and give information to customers when it works best for them. Having a digital agent available 24/7/365, around the world, to assist customers transforms a carrier’s relationship with their policyholders to be one of continuous touchpoints. Carriers with faster and easier service improve customer satisfaction and retention.

2. Free Up Employees for High-Touch, More Meaningful Interactions

Insurance teams spend a lot of their time answering customers’ questions, no matter how routine, and forwarding customers to other team members who help them with something more specific in their query. These types of calls with myriad handoffs are not productive or satisfying for agents, are confusing for insurance customers because they usually reflect the hidden internal complexities of the support organization, and they can be addressed with conversational AI.

The need to commonly transfer customer inquiries to two or more employees is a warning sign of a people-driven support process that cannot manually keep pace with the variety of customer questions. Unburdening employees from the minutiae frees them to focus limited agent time on higher-touch, personal interactions with their clients; also addressing more complex queries in a timely manner.

There’s a common chatbot misconception that they intend to replace customer support staff and under-value real people. On the contrary, chatbots can complement the efforts of service representatives and claims adjusters and assist them in their work. In addition to fully handling simpler, predictable requests end-to-end, chatbots can partner with a carrier’s employees to automate the predictable tasks within a larger, more complicated process.

3. Reduce Operating Costs

When chatbots can quickly handle customer questions and routine requests, they can produce significant operating expense reductions. According to Gartner, companies report as much as a 70 percent reduction in phone calls, emails, and person-to-person chats after implementing a virtual assistant (VA). In the insurance industry that’s especially important because carriers are under increased pressure to reduce expenses wherever possible in a volatile economic climate.

Throughout the insurance journey, a chatbot can reduce the need for prospects and customers to reach into a costly enterprise service center, making a carrier’s personnel more readily accessible for inquiries that are more complex, or when a person-to-person interaction is what the caller prefers. This helps to streamline insurance processes for greater efficiency and in turn savings.

For smaller companies not quite ready to ramp up their operations, a chatbot can save the time and cost of having to hire and train employees.

4. Generate Leads

Conversational AI in insurance can automatically generate leads. Chatbots use prompts to engage visitors to a carrier’s website, social media, and other online touchpoints. By making it easy for visitors to share details about their needs and answer their questions, a virtual assistant can automate a mutually satisfying engagement. The carrier has the necessary information to further the conversation and relationship. For example, the visitor’s questions could reveal something has happened in their life that has changed the customer’s needs where they now require new insurance products.

This data gathering can become fully automated with a chatbot, no longer requiring the involvement of a human, be it a service representative speaking with a customer or an appointed insurance agent. Online lead generation through an interactive virtual assistant can work effectively alongside traditional networking methods, community engagement, and referral programs, and can aid every sales team, agent, or broker. It helps speed customer acquisition for insurance companies while gathering relevant information that prospects may not want to submit to traditional static web forms.

5. Integrate with Internal Systems

Although not all types of chatbots have this capability, an AI-powered chatbot can integrate with an insurance company’s core systems, CRM, and workflow management tools to further improve customer experience and operational efficiency. Robust integrations provide tremendous value because they turn a virtual assistant into a comprehensive solution that’s continuously updated with the most current customer, product, and service details for a tailored experience, after they have been authenticated, of course.

3 Insurance Chatbot Use Cases

Across marketing, quote, policy, enrollment, billing, and claims journeys, conversational AI has many practical uses for an insurance company. In fact, interactive agents can offer tremendous value from end to end on the insurance customer’s journey.

It’s important to remember that the value chatbots offer enterprises increases over time. Chatbots become more accurate as they get exposed to higher volumes of training data and information that is more relevant to a carrier’s use cases, lines of business, distribution channels, products and services, and associated terminology. As a result, it’s important for insurance carriers to be realistic and strategic about the use cases they begin with before expanding scope – a crawl, walk, run approach fosters critical learning early.

1. Answer FAQs and Provide Policy Information

A virtual assistant can be helpful for answering the frequent questions customers ask their insurance company, agent, or broker. A conversational chatbot uses natural language processing (NLP) to handle the nuances of conversation and understand what a person is trying to say. Handling nuance and understanding utterances let conversational AI solutions respond directly to inquiries. It combines the best of human and artificial intelligence for a satisfying -- and frictionless -- exchange. It also saves agents the burden of needing to remember, or manually search, an entire knowledge base for answers.

Since the insurance bot is easily fed information from sources such as the insurer’s products and policies, and the most commonly faced issues, it’s low effort to integrate the company’s knowledge base into the customer-facing tech and to provide a better customer experience.

2. Onboard Customers and Manage Policies

A virtual assistant can help new customers and members take maximum advantage of the insurance company products or benefits they just purchased through a guided onboarding process. This can include signing up for safety or wellness programs and downloading their digital ID card. An insurance chatbot can answer common how-to questions, from a policyholder updating their address, paying a bill, or filing a claim.

Chatbots support an omnichannel customer service experience where conversational AI enables customers to move back and forth seamlessly between different communication channels without having to “reintroduce themselves” each time they shift from mobile phone to desktop, for example. This streamlines policyholder journeys like reviewing or changing their insurance policy.

3. File and Process Claims

The “always available” virtual assistant is useful during the insurance claim filing process. A one-dimensional claims process would involve multiple phone calls back and forth between the different parties. If there’s missing information, that synchronous dependency makes it hard to resolve claims quickly.

An AI-enabled insurance chatbot operates across multiple channels and collects the needed reports, photos, and other claim documentation. Policyholders or insurance agents no longer have to sit on hold, waiting for the next available call center representative. They can report their insurance claim and get the assistance they need at the convenience of their own schedules.

In addition, a chatbot can be triggered to proactively reach out to a policyholder, using the relevant data from a carrier’s systems. For example, before, during, or after a catastrophic weather event, an insurer can send their customers information about how to prepare for the storm and how to file insurance claims, even before the calls start coming in. The AI chatbot can not only alleviate demand on the call center during peak demands for customer service by offering self-service, but it can also lessen the frequency and severity of losses that become new claims.

How to Implement Chatbots for Insurance

Now that we’ve shown you how chatbots can positively transform insurance service, efficiency, and even employee engagement, here are some different ways to integrate your service personnel and virtual agents.

Location, Location, Location

The use of chatbots instead of a live chat, or human service representative, can’t be deployed in every digital location. Insurance companies must weigh the benefits or costs of integrating chatbots into their various online solutions, including mobile apps, portals, websites, and social media platforms.

Facebook Messenger is a mature digital technology that a significant proportion of a carrier’s target audience of customers and prospects may already be using regularly. If so, integrating with that social channel is an opportunity to meet the customer where they already are operating and allows carriers to provide an aligned insurance brand experience. Operating in a popular social channel also prevents the friction, and expense, of mandating a customer’s use of a mobile app for queries where it should be easy to get a quick answer. Chatbots in social channels can also guide customers towards resolving complex issues or obtaining highly detailed information.

A best practice for choosing the digital location of a chatbot is to understand customer needs and service expectations at each online venue. For example, if customers expect to leverage a carrier portal to validate beneficiaries or access detailed information like loss runs, that is likely not the right place for a chatbot. Those types of interactions are too time-sensitive, pressing, and nuanced. Conversely, a carrier portal deployed with a chatbot may be the right place to share premium information and facilitate payment setup.

X-ray Vision

The true first step in implementing a chatbot for insurance is developing an automation strategy that focuses on the key themes of customer ease and customer choice, and that understands that conversations with customers are two-way interactions. Chatbots can reinforce an “open door” policy where the customer or carrier can start the conversation.

With the right technology, an accumulation of digital engagements builds a holistic view of customer behavior and needs. Better knowing the customer is a benefit to everyone involved in providing them service, including the carrier - and often an insurance agent. This view of collected data spans phone, email, and chat utilization. Carriers use that aggregated view to more accurately analyze where customers engage, better understand why consumer expectations change, and can also reveal insurance product cross-sell and upsell opportunities.

Channel preferences are fluid, and solutions originally built for personal conversations continue to gain popularity for business interactions, too. Engagement analytics can use channel information to reveal the patterns in the overall book of business, line of business, journey, and customer-specific patterns. It can also sound the alarm if the information shows channel utilization unexpectedly and quickly shifting, like a dramatic uptick in call center calls at a specific time of day while chatbot usage plummets.

Mediator

An essential best practice for implementing chatbots in insurance is to know when automation is appropriate and when it’s essential to involve an employee. AI-powered chatbots use sentiment analysis (a natural language processing method) to automatically trigger human intervention when it identifies that the customer has grown frustrated or feels like there’s no path forward for finding a resolution.

It may be appropriate to employ an insurance chatbot with routine account updates and simple information sharing, but ill-advised for a chatbot to be the single engagement path in the aftermath of a serious accident. Chatbots can leverage national language understanding (NLU) to recognize the scenarios where hands-on attention is needed automatically and make that warm hand-off to a customer service representative or call center team member. And that insurance company employee who answers the phone will not need to ask the policyholder or insurance agent to repeat what they already shared with the chatbot.

How to Evaluate Insurance Chatbots

There are various virtual assistants, from a chatbot that can answer basic questions and capture leads to an enterprise-grade AI chatbot that handles complex insurance workflows from end to end. There can also be a big difference between solution providers—one that simply sells you a bot and a partner committed to providing personalized service. Automation requires unique customer service management and metrics to determine its success.

Use these commonly asked questions as a starting point to evaluate vendors and chatbots for insurance.

How can a Chatbot Help Me Meet My Goals?

A chatbot helps your company serve your customers more effectively while realizing significant cost savings. To get an accurate measurement of a chatbot's benefits, you should establish benchmarks around current customer experience issues, claimant inquiry process, and requisite resolution steps.

Specifically, how are you trying to answer a specific insurance quote, policy, billing, or claim problem, and what is it costing you today to find the answers? Consider both your direct and indirect costs. If your company is overwhelmed with inbound call volumes, consider how many calls you get on average and above-average days. How much back and forth occurs in these phone calls? What are the top 3 drivers of your inbound calls, email, mail, and faxes?

Assess your critical, high-volume, and predictable outbound interactions, too. For example, ask if you’re required, per regulation or customer service level agreements, to make customer or claimant contact at specific points in time across the lifecycle of a claim? Do you have customer, insurance agent, or broker deadlines to respond to quote submissions or process policy changes?

An experienced and reputable solution provider will partner with you to set key performance indicators (KPIs) to assess chatbot efficacy. These metrics might indicate the number of phone calls deflected proactively or in real-time, where callers are encouraged to interact with a virtual agent to have their questions answered. KPIs for completed conversations drive expectations up front – both the how much and why. Drivers of the latter include customer expectations, compliance expectations, or even competitive pressures. Other important indicators of chatbot efficacy can include improved C-SAT and NPS scores, which are based on customer satisfaction.

How Quickly Will I See Value?

Time-to-value (TTV) for chatbots can be up to three months after deployment for no-code or low-code virtual assistant solutions and three to 12 months for more complex systems that demand professional services, like a system integrator. In your evaluation, consider if there is a substantial financial investment or additional time investment required before your customer service team, underwriting organization, or claims adjusters get any relief. Weigh the short-term business impact against financial and time requirements.

The total cost of ownership (TCO) is key to define up front to include the solution vetting process:

Who is responsible for implementation?

If the solution provider offers setup assistance, is there an additional cost? If your company is responsible for implementing the system, will it require much attention from your IT department?

What is your desired operating model after you go live with your first chatbot experience?

Are you looking to minimize the pull on your IT teams to expand your chatbot’s scope?

What is your desired pace to expand the customer conversations where the virtual assistant offers a digital self-service solution?

TTV depends on the complexity of the automation platform coupled with the complexity of the carrier’s ecosystem (if not multiple sub ecosystems) where integrations are necessary. Enterprises will reach a higher level of productivity more quickly with no-code solutions that require minimal IT effort, and when experienced people who are familiar with the front line of customer service are responsible for designing automation workflows.

How Does the Vendor Protect Customer Data?

Data breaches are a major risk and insurance providers recognize they are a prime target. When a company hosts sensitive customer and claimant information, you must ensure that a partner with access to your customer data follows compliance regulations, including HIPAA (or the comparable privacy standard outside of the United States), General Data Protection Regulation (GDPR), SOC 2. PCI DSS also comes into play if processing credit card transactions. The security team within your IT organization are invaluable partners in your automation technology solution selection process, ensuring adherence to your standards, which include all of your customer and conversational data protection requirements.

Unleash the Power of AI for End-to-End Customer Service

Chatbots are a useful tool for customer engagement, but in reality they are a single channel in an overall customer experience strategy that each enterprise must design for themselves.

Chatbots may handle inbound conversational requests from policyholders, but what if it were possible to answer questions before they’re asked? What if it were possible to proactively distribute information to every policyholder and simultaneously open lines of communication, so customers have the flexibility to choose their preferred channel to respond? All without added expense in time, resources, or money to offer the same self-service through multiple channels.

Ushur’s Customer Experience Automation™ (CXA) provides digital customer self-service and intelligent automation through its no-code, API-driven platform. Ushur’s CXA platform makes it easy to train and deploy a chatbot. Insurers can also use Ushur within citizen developer teams to open voice, email, text, and other messenger channels for customers, members, claimants, agents, brokers, and providers to converse with them and build an overarching comprehensive and differentiating customer experience. Insurance brands can use Ushur to send information proactively using the channels customers prefer, like their mobile phones, but also receive critical customer data to update core systems. Insurers don’t have to replace core systems–they can integrate Ushur.

If your organization needs help in designing an end-to-end customer engagement strategy that includes a consistent brand experience across the full insurance lifecycle, and is considering implementing chatbot platforms or other insurance automation processes for insurance, contact us today for a consultation on insurance experience best practices.

About Ushur

Ushur delivers the world’s first AI-powered Customer Experience Automation™ platform that has been purpose-built, from the ground up, to intelligently automate entire customer journeys, end to end. Designed to deliver delightful, hyper-personalized customer experiences through rapid issue resolution and unified, omnichannel engagement, Ushur is the first-of-its-kind system of intelligence. It combines Conversational Automation and Knowledge Work Automation in a No-Code, Cloud-native, SaaS platform to digitally transform every step of the complete enterprise customer experience – from Micro-engagements™ to entire customer journeys.

Backed by leading investors including Third Point Ventures, 8VC, Pentland Ventures, Aflac Ventures and Iron Pillar, Ushur’s Customer Experience Automation™ solutions are currently in production at some of the leading insurance providers across the globe including Irish Life, Unum, Aetna, Cigna and Tower Insurance.

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