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Insurers are serious about AI-powered chatbots

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Chatbots, or Virtual Assistants (VA’s) are no longer so uncommon as to cause consumers to do the virtual equivalent of gawk or an awkward stumble when they come across one. Chatbots have quickly moved into the mainstream. Insurers are no exception, and it is much more than novelty that is driving chatbots deeper into the industry. While insurers may just be scratching the surface of entering the customer service by VA foray, the use of chatbots are gaining popularity quickly across the industry.

Abe (Lincoln Financial), ABIE (Allstate), askPRU (Prudential Singapore), Jim (Lemonade) and Kate (Geico) might not be household names yet, but these chatbots are more than tentative first steps toward achieving the benefits that artificial intelligence brings to the customer experience for both life and P&C insurers. These five insurers are just a slice of the text- or voice-based chatbot activity in the insurance space. Coverager.com lists thirty-four insurers, spanning from old guard to recent vintage, that have deployed chatbots, and undoubtedly, there are a multitude more that have not gone public yet.

How are chatbots helping insurance customers?

Modern chatbots can handle a range of functions that matter to the customer and are important to get right. From making changes to beneficiaries, getting a copy of a policy, checking billing information, to guiding small business customers to the proper coverages, and helping consumers calculate their life insurance needs in under two minutes, chatbots are enhancing the insurance consumer’s experience by offering expert assistance 24X7. Think humans want to talk to another human for customer service? Think again – 69% of consumers prefer chatbots for quick communication. Looking for further proof? Ask a millennial if they prefer to text or make a phone call.

Benefits for everyone

There are obvious benefits from this approach for both the customer and the insurer. The customer gets the service that they are looking for quickly and efficiently, while the insurer lowers operating costs with reduced manpower to meet customer needs of regular, everyday type requests (passwords, policy copies, billing questions, etc.), while maintaining a high level of service and satisfaction. Also it should be pointed out that an added benefit of implementing AI-powered chatbots that may not stand out at first, is to the actual customer service agents.

These professionals, who attend to repetitive conversations on an everyday basis, are now spending their time handing more unique, individual, and ultimately, more fulfilling customer service requests. This is attributed to AI-powered chatbots answering many of the repeated questions that require no human assistance at all. With the cost of poor customer service measured in the billions across all industries, eliminating the common and repeated conversations, a customer service agent can focus their time on more satisfying, value additive interactions with customers.

What results are insurers seeing with chatbots?

Well, true to form, insurers are a fairly tight-lipped lot when it comes to publicly disclosing the benefits of technology innovations. But, fear not, IBM’s expertise (See The Forrester New Wave™: Conversational Computing Platforms, Q2 2018) provides insight into the results that many insurance clients have seen. One insurer observed that 30% of their customer service calls can be answered by their chatbot, while maintaining customer satisfaction at high levels. A chatbot deployed in a sales assistance role gave 18+% increases in policies sold. From a customer service labor cost basis, one insurer experienced a drop of 45+% per call. Clearly, these insurers are onto something. They are performing so well that they can help reduce customer service costs by 30%. That’s a big number, and it will continue to improve as chatbots get even smarter. 

What does the near-term hold for chatbots?

I believe that chatbot adoption will continue to gain steam, both as a customer-facing virtual entity and as a customer service assistant. Chatbots directly deployed will help buyers get further along in their buying journey, and can even close the sale. This application of chatbots will make the biggest splash for AI in the next 12 – 18 months. I also look for strong deployment trends of chatbots that enhance and support agents handling more complex service questions in the insurance industry. Chatbots are well-suited to pull pieces of data out of legacy systems, assemble them into a coherent insight or conclusion, and help a customer service agent as they assist the customer. My experience says that insurers that deploy both of these applications will be difficult to beat.

The implementation of customer service virtual assistants is on a very short list of business technology that can be invested in that can both lower operating costs while increasing customer and employee satisfaction simultaneously. As these virtual assistants become further engrained in our everyday lives, IBM is positioned as a leader in the industry to help your business accomplish both. We invite you to explore IBM’s cognitive virtual assistant solutions to introduce a chatbot to your waiting clients and customers.

For further information:

Learn more here about IBM Insurance and our chatbot solutions using Watson Assistant.

Want to get started building your own insurance chatbot? We put together a blog series to help you, here.

Looking to see how AI is driving customer engagement in call centers? Check out the IBM Institute for Business Value’s Reinventing the Call Center thought leadership, here.

Global Insurance Eminence Lead

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