Updated on October 21, 2022

Traditionally, the insurance industry has always been a bit of a mystery. Complex processes, hard-to-digest information, and legacy systems meant that insurance was an alien concept for many people.

However, the rapid advancement of technology has brought about a seismic impact on the way insurance firms operate today. There is no dearth of information online, which means that customers today know all of their options. Additionally, the digital age also means that customers expect seamless, personalized, and rapid services. Something which outdated legacy systems and sophisticated processes cannot keep up with.

Chatbots for insurance have been around for a bit, but more and more insuretechs are now investing heavily in AI and chatbots.

Case in point, research shows that the insurance industry invests an average of $124 million in AI and chatbots. Interestingly, this figure is $54 million more than the average across all industries.

Clearly, the insurance industry is placing big bets on chatbots and conversational AI.

With companies spending all this money, it is key to understand how exactly insurtech companies can use chatbots and their benefits. And this is what we cover in this article.

Let’s dive in and understand more about chatbots in insurance.

8 use cases of chatbots in the insurance sector

1. Settling and processing claims

Claims management and settlement is a complex process that policyholders dread. There is a lot of back and forth between insurance firms and their companies during the settlement and processing of claims, and human agents manage a lot of these.

With chatbots, however, the process becomes much easier. A chatbot collects all necessary information from policyholders without the involvement of support agents. You can then send this information can then be to the concerned stakeholders, and all they have to do is evaluate and decide the reimbursement amount. The chatbot can also send automated reminders and notifications to policyholders so that they are aware of the status of their claims.

Using chatbots also eases the processes of settling claims for policyholders since they don’t have to constantly follow up with insurance agents or support teams.

2. Answer queries from existing customers

Policyholders will often have queries regarding their policies and what they entail. An chatbot for insurance is available around the clock and can help policyholders with any queries regarding their policies.

This also increases agent productivity since a chatbot can manage redundant L1 queries, freeing support agents to focus on more complex customer issues.

3. Explore cross-selling opportunities

One of the critical aspects of cross-selling is to provide your customers with relevant product suggestions. Chatbots for insurance are capable of logically estimating which products a customer is likely to buy based on existing customer information. By providing customers with pertinent solutions, chatbots increase the likelihood of cross-selling.

4. Provide policy information and answer specific questions from new customers

Every time a new customer signs up for a policy, they will have endless questions regarding every detail of their policy.

Additionally, it is also important for insurance companies to take their clients through every aspect of things. This can include things like coverage, premiums, payment terms, etc.

Instead of having brokers and support agents do this, you can have a chatbot in place. This chatbot pulls up all the necessary information and sends it to the customer whenever they have a question.

One of the benefits of chatbots is that they are able to give customers the exact information they are seeking. That too without having to jump through hoops.

5. Act as the first line of contact for agents

While settling and managing claims from policyholders, agents have to collect some basic information. For instance, for a damage assessment, agents have to collect photos and videos of the damaged asset for evaluation. 

One can automate chatbots to collect this information from customers beforehand so that agents have all of these documents readily available. This way, your agents need to come in only to evaluate the damage and decide on the liabilities, saving them time and effort.

6. Help in insurance premium collection

When it comes to insurance premium payments, customers often face challenges in finding the appropriate mode of payment and deciding how it should be paid.

Chatbots for insurance sector resolve this problem by helping customers find all the relevant information they need in order to make their premium payments. In fact, you can use chatbots to set automated reminders so that policyholders never miss a payment, thus avoiding fines and penalties. This also ensures that insurance firms receive premium payments on time from customers.

7. Data collection for lead generation

Deploying a chatbot on your website is a great idea to engage prospects and collect their contact information. You can also leverage Chatbots to score your leads. This way your sales teams need to handle only the most relevant leads thereby boosting the probability of conversions.

8. Bot to live agent hand-off

The best customer experience is an amalgamation of both technology and the human touch. Chatbots can handle basic queries and can dispense necessary information. In cases where you require human agent involvement, you can set up chatbots in such a way that there is a seamless handover of customer information from bot to human.

Benefits of chatbots in the insurance industry

Chatbots bring about a number of benefits to the insurance industry. 

Here are a few of them.

1. Increased agent productivity

Chatbots are capable of handling simple L1 queries, which tend to be repetitive. This means that support agents no longer have to spend time on these types of queries and can instead focus on more complex customer tickets. This boosts agent productivity.

2. Decreased costs

You can equip chatbots to handle a large volume of incoming queries and also automate processes such as capturing customer data. This means that insurance firms can scale up their customer service efforts without having to hire a large team of support agents.

3. Around- the-clock support

You never know when a customer might have a complaint or a query about their insurance policy. Chatbots for insurance are available 24/7 and can be used to answer simple questions, resolve queries, and even give product suggestions. This ensures that your customer service is fast and efficient, thus increasing customer satisfaction.

4. Self-service for customers

Nearly 40% of customers prefer self-service over human contact, making it a key aspect of a  great customer experience.

This is one of the biggest benefits of chatbots. You can use them to enable self-service for customers by setting it up to provide relevant information and helping policyholders to find answers to simple FAQs.

The future of chatbots in the insurance industry

As the world becomes increasingly digital, it is critical for the insurance industry to invest in AI and automation to amp up its customer experience. It is important to thoroughly understand the applications of chatbots for insurance and decide how you want to strategically implement them to drive business growth. Chatbots can help you streamline your customer experience strategy, bring down operational costs, and enable you to provide proactive rather than reactive customer service.

Wrapping up

Insurance is quite a complex industry. However, with the right technology and processes, you can create holistic experiences for insurance customers. With chatbots, you can easily anticipate the needs of your customers and enabling you to provide proactive services.

It is safe to say that chatbots are the next frontier for advancement and innovation in the insurance industry.

At Kommunicate, we are envisioning a world-beating customer support solution to empower the new era of customer support. We would love to have you on board to have first-hand experience of Kommunicate. You can sign up here and start delighting your customers right away.

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Devashish Mamgain

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