7 Insurance Bot Use Cases for Effective Customer Journey

Insurance Bot Use Cases

For decades, the insurance industry was able to rest on its goodwill and credibility. Whereas customers could operate competitive policies, claims, and coverage using manual procedures. These outdated measures made insurers face myriad challenges. Fast forward to today’s digital world, legacy systems in the insurance industry are constantly transforming while customers are no longer left out of the loop to access quick and relevant information.

However, with the ongoing competition – policyholder expectations for seamless, on-demand services have increased predominantly. Therefore, demystifying insurance processes has opened doors for customers to shop policies, issue auto claims, review status, and even self-service their policies online.

Moreover, thriving in the new environment have you ever imagined potential customers knocking on the door of an insurance provider and returning unattended? This can happen due to a lack of personalized experience and the unavailability of relevant information. Therefore, to bridge this gap, insurers around the world are investing in AI-powered insurance bots that efficiently assist claims automation, lead conversions, self-service policy, add-ons, and underwriting distribution to deliver customer-centric solutions.

Did you know? A recent survey conducted by McKinsey observed that – insurance companies who provide exceptional customer experience generate 4X times more revenue and 30% increase in profit margins. Surprisingly, the rest of 70% are unable to achieve greater results due to poor and ineffective customer service tools.

What is an Insurance Bot?

One of the most powerful ways to create an ideal online customer presence is by deploying a conversational AI bot for insurance. On-demand access to details and expert guidance in evaluating policy administration is what customers look to overhaul and make data-driven decisions. So far, we have understood that a bot for insurance acts as a significant change in providing constant pre-purchase and post-consumption support by inquiring about policy issuing, claims to file, and settlement. But first, let us understand the best-suited definition and objectives of an AI bot for insurance.

Insurance Bot Use Cases

An insurance chatbot is an intelligent AI-powered virtual assistant that is designed to ease two-way communication among insurers and customers at every step of their journey without human intervention. Additionally, a variety of automation procedures persisting to Artificial technology (AI) and machine learning (ML) is used to deliver a unique, high-quality customer experience.

Furthermore, an insurance bot can enhance long-term customer engagement by offering feature-rich capabilities like omnichannel experience, round-the-clock service assistance, and multilingual support to provide an end-to-end digital claim experience for insurers, agents, partners, and customers.

Study by Gartner predicts that by 2022, Emerging AI technologies like ML applications, chatbots and multi-channel integration will generate massive impact on over 70% of customer interaction

Rise of automated insurance bots over the years

In the era of hyper-connectivity, the rise of messaging applications has made chat the most prominent mode of easy and hassle-free communication. Customers expect services that give them access to seamless communication and AI chatbot is executed by leaps and bounds that offers instant resolutions of customer queries regarding quote requests, claim status, or coverage incurred. The goal is to stay available for customers at each touchpoint while discovering, optimizing, and troubleshooting insurance products or services to build long-lasting customer relationships.

Deploying insurance bot usage for effective customer journey

Over the years, insurers recognize the value of AI chatbot services for the automatic resolution of inbound tickets, policy add-ons, and assisting agents to gather personalized information. A study conducted by Business Insider suggested that 60% of insurance executives observed a lack of AI-powered and Machine learning (ML) tools resulting in poor customer experience. However, 85% of companies started deploying chatbot initiatives to a moderate level.

According to an IBM report, investments in AI technologies and cloud adoption are rapidly increasing from 1.1% of GWP in 2018 to 1.5% of GWP in 2022, this shows an increase of 36%. Additionally, when we drill down the significant usage of chatbot services, almost 2/3rd are effectively utilizing customer service, auto-claims, and customer interaction and onboarding capabilities. Therefore, this brings down customers’ preferences influenced by insurers handling claims, giving more personalized customer service and trustworthy two-way interactions.

Insurance Bot

Gear up for Real-time Insurance Bot use cases:

2017 was the year – when Aflac was the first ever insurance company to feature an AI-powered chatbot and foster a well-designed 24/7 service bot for insurance on their website. Since then, there has been no stop to advancements in AI-powered technologies. As a result, insurance companies did not step back to integrate equipped bot systems to create a dramatic impact on the overall customer journey.

7 Insurance Bot use casesLet us take a quick peek into 7 insurance bot use cases based on the key touchpoints of a typical customer journey.

Intensify Customer Interaction

Often customers and policyholders prefer to research their queries or information before consulting an expert agent. A conversational AI bot for insurance plays a great deal in delivering extremely accurate information relating to optimal policy administration from multiple carriers with the perfect combination of artificial and human intelligence.

Customer Interaction with AI Bot

Usually, following outdated measures, insurance agents end-up spending ample time providing policy servicing, claim filing, and underwriting processes to their customers. The humanlike bot can easily manage customer trivial queries, claims, and quote requests. With this, insurers or agents can focus on solving complex problems.

Let us talk about the Lemonade customer service bot that sets apart with its unique and seamless transitional functionalities from where customers can get the benefit of tailor-made information about their buyer persona as they can view data comparison and can access claims processing and auto-renewals in a breeze without the need to wait for long complicated forms

Lemonade claims that post chatbot integration it has collected 100x more data-driven points per customer when compared to other companies who are still applying generic customer-centric tools.

Claims processing and submission

Claims settlement is a tardy process to follow which requires the involvement of insurance providers, inspectors, and agents. The process takes around 30-90 days or more to issue claims, submit and then reach the settlement process. In such cases, the customers constantly follow up with a customer representative or agent to check the claim status but there can be chances of claim requests going unattended.

Thus, simplifying this process with a dependable AI bot can smoothly settle claims faster. The policyholder simply needs to explain the nature of the claim and thanks to the chatbot, which can smartly pull up the designated policy from the insurer’s database or CRM and automatically initiate the auto-claim filing and settlement process.

Smart bot validates claims submission

For instance, Mitchell – An Enlyte Company, observed the transition to AI-powered bot service effective where they could seamlessly review automating physical damage and claims estimation. “Automating estimating” using AI vision is something they follow which means extracting 75-year-old content from the Mitchell database and integrating it with their conversational AI bot.

This includes when policyholders issue their claim, a chatbot can collect the data from the source to process the claim with required documents, policy numbers, and images or videos requested depending on the type of claim. Thus, leveraging AI-powered in-built image recognition in chatbots allows users to also keep track or upload new images and files if the claim filled does not meet the requirements.

Another example of an American car insurance company – Metromile, observed that after integrating intelligent AI bot they were able to approve 70-80% of claims easily with cost-effective measure and faster settlements.

Lead generation and conversion

Bot for Insurance has changed the way businesses work while providing efficient customer support, but the most essential aspect is lead generation. Leads are nothing but potential customers. Whereas, in a larger frame such new or existing users are acquired on a website or other digital touchpoints using intelligent prompts and generate valuable customer information

In such cases, chatbots play a vital role in scoring leads and ultimately reaching the conversion phase by marketing more engaging and personalized campaigns. For instance, a study conducted by Harvard business review audited for U.S companies assessed that based on various inputs, the bot is segmented and niched down as per relevant quote, policy issuance, and claims process. So that only qualified leads can be shared with sales teams.

Furthermore, the research suggests that if a customer query is remained unattended within a timeframe of 5-10min, the odds of conversion rates decrease by over 400%. In such a situation, a well-design Conversational AI chatbot not just create dramatic changes in lead conversion but also elevates the user with a faster resolution with reduced customer effort.

Premium Payment Collection

Customers or policyholders are bound to process recurring payments to the concerned field agent who collects those premium payments. Although the entire payment process is online, still customers get confused regarding the payment procedure and other teams and conditions. In such cases, chatbot services act like a complete savior where customers find appropriate measures and channels through which they can renew their policy and smoothly find relevant payment information.

For instance, price offerings are often confusing for customers. Lemonade bot service offers millennials and younger-niche audiences with less experience in insurance policies – a flat fee of 20% from their customer premiums to eliminate conflict of interest. Also, encourage such customers with their “Giveback program” that allows them to donate leftover funds to charity by maintaining a stable loss ratio.

From 2017 to 2021, Lemonade bot services observed an increase in their number of premiums sold from $9 million to $16 million.

Upsell and Cross-sell opportunities

Customers or policyholders are constantly on the verge to buy insurance-related policies or services online. During that window, customers come across with an opportunity for cross-selling or up-selling. While this goes on, the crucial part to contemplate is marketing the relevant product information, avail policy add-ons, claims, coverage benefits, or underwriting review which is considered extremely important for efficient cross-selling.

In such scenarios, a bot for insurance can be the most effective solution by rendering seamless e-learning models, and in-built personalized features that can smartly help the sales teams or agents diversify customer preferences and product recommendations. Therefore, with these capabilities of chatbot services, the cross-sell and up-sell opportunity scale with higher profit margins and reduced workflow efficiency.

Reduced costs and workload

The most significant advantage of AI-powered technological intervention with chatbot services has changed the face of the insurance industry. Here we are not just talking about chatbots, but also the deployment of RPA in insurance. Did you know? – 80% of inbound queries on policy servicing, underwriting, or claims submission received by customers through insurance bots are considered “routine conversational FAQs” which can be resolved. While the remaining 20% are considered complex policy queries which require human intervention using an intelligent AI approach.

For Instance, Lemonade chatbot services apply a formula known as “Easy to Switch” meaning a series of generic services-based questions are highlighted and responded to with best-suited answers but once it gets complicated – the chatbot automatically connects to the concerned agent support.

Wrapping Up:

With multiple insurance bot use cases opening doors to the future of AI, chatbot services are expected to be a big game changer throughout the insurance value chain. Right from pre-purchase, customer services, advisors, and marketing to other back-end sales and operations. Bot for insurance is poised to make a mark and build a stronger customer experience.

In the years to come, we can witness the role of human agents completely being switched from mere intermediaries to advisories. This can only happen with the help of this intelligent live-support assistance which offers relevant coverage incurred and manage policy administration effectively. Thus, the pace of AI technologies is only anticipated to accelerate with time and insurance bots will emerge in light and flourish far beyond into the digital future.

Explore more to learn how insurance brands can make the best use of their customer support by automating an AI-powered chatbot that streamlines relevant insurance products process and provides 24/7 round-the-clock availability to solve real-time queries relating to policy issuance and claim settlement faster and hassle-free across key digital channels


Aishwarya Chandrasekhar

A content marketing enthusiast, currently on a quest to channel my vision, creative thinking and innovative strategies through my writing. I believe that each day presents itself as an opportunity to learn, grow, and set path for driven goals

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