Insurance Chatbot Examples: 5 Innovative Use Cases

August 13, 2020
12:00 am

Insurance chatbots are far from a mere luxury add-on. They’re one of the most effective solutions for leveling up customer experience – and the insurance industry could certainly benefit from that.

This is because insurance has idiosyncrasies that make creating customer engagement and positive experiences tougher than in other industries. For example:

  • Insurance is often seen as a necessary evil – not something policyholders enjoy dealing with, even if they’re generally satisfied with the service they’re getting.
  • The global digital shift means that insurance companies no longer control the medium or place consumers get information from, or how they compare providers with one another. Insurers are also obliged to offer speedy digital services for policy signups or declaring claims.
  • Insurance faces stiff competition from other industries, like banks and other service providers. According to research by Accenture, a decent percentage of people are willing to buy insurance from non-insurance companies:
competitors of insurance companies

So, it’s clear the insurance industry has its hands full finding ways to enhance customer experience and loyalty, and beat its competition to the punch.

Along with other strategies to improve customer experience in insurance, especially digital ones like live chat, insurance chatbots can be a big help.

Benefits of insurance chatbots

Chatbots are more than just a fad for insurers to jump on. These virtual assistants are set to become an integral part of the insurance customer experience strategy. Their benefits are:

  • Automation. Repetitive queries can easily be handled without human intervention – the bot can also connect consumers with an agent when needed.
  • 24/7 support. Insurance claims are often urgent matters or cause anxiety to policyholders. Turning on a chatbot whenever your customer support team isn’t around means you don’t leave policyholders in the lurch and improves customer experience.
  • Continuous business. Similar to the 24/7 support, chatbots can help providers keep consumers interested even if agents aren’t around. For example, insurance chatbots can produce a quote for the consumer so they won’t bounce.
  • Engagement. Chatbots can pop up when consumers are browsing your site or app and ask them questions or proactively offer relevant information based on the content they are consuming.
  • Personalization. Using machine learning and data from consumers, chatbots can offer personalized plans, and help you get to know your customers better.
  • Gather data. Chatbots help you gather valuable feedback, either via surveys administered by the bot or by collecting the questions people ask. You can also capture email addresses so your insurance agents can follow up with consumers.

Despite these benefits, just 49 percent of banking and insurance companies have implemented chat assistants (only 17 percent when it comes to voice assistants). This means that, despite how much chatbots are being talked about, they still offer a decent competitive advantage for providers that use them.

insurance chatbots statistic - half of banking and insurance companies have chat assistants

Chatbot insurance examples: 5 top use cases

If you’re curious to learn more, five use case examples in particular are interesting to know about. An insurance chatbot can:

  1. Answer FAQs
  2. Assist with issues
  3. Help with claims
  4. Offer personalized services and quotes
  5. Send notifications

Let’s look at those use cases in more detail.

1. Answer FAQs

Insurance is a perfect candidate for implementing chatbots that produce answers to common questions. That’s because so many terms, conditions, or plans in the industry are laid out and standardized (often for legal reasons).

So, a chatbot can be there 24/7 to answer frequently asked questions about items like insurance coverage, premiums, documentation, and more. The bot can also carry out customer onboarding, billing, and policy renewals.

And this approach works: according to a 2019 study, 73 percent of retail banking and insurance executives report more than 20 percent increase in the number of interactions their organizations were able to handle thanks to chat assistants.

2. Assist with issues

Your chatbot can provide effective first-tier support. For example, if a consumer wants to complete a claim form, but has trouble, they can ask the chatbot for help. The bot can send them useful links or draw from standard answers it’s been trained with.

Chatbots also act as the connectors to higher level support. If they can’t solve an issue, they can ask the policyholder if they’d like to be put through to an agent and make the connection directly. The agent can then help the customer using other advanced support solutions, like cobrowsing.

3. Help with claims

This is a very important insurance chatbot use case. According to research, the claims process is the least digitally supported function for home and car insurers (although the trend of implementing tech for this has been increasing). 

As part of efforts to make claims smoother for policyholders, chatbots can give a hand in the regular course of claim-processing. When customers need to file claims, they can do so fast (and 24/7) via a chatbot. The chatbot will then pass on that information to an agent for further processing.

This use case helps reduce the time it takes to process claims. The number of claim filings that your organization can handle increases, too, because humans don’t need to scramble to service every single customer directly. That’s especially useful in times when claims are so numerous  that they make it difficult for policyholders to get through to your call center (e.g. in cases of natural disasters).

An example that stands out is a chatbot from 2018. ZARA, as it was named, was implemented by Zurich UK to improve the claims process. According to the insurer, ZARA was designed to help customers report property and motor claims online in only a few minutes. Here’s a customer story on ZARA:

4. Offer personalized suggestions and quotes

Chatbots that use analytics and natural language processing can get to know your audience pretty well. This means they’ll be able to identify personalized services to best suit each policyholder and recommend them directly, helping generate leads or upsell opportunities.

Some bots can even achieve automated underwriting. If, for example, a customer wants to buy an insurance product, the bot can ask them a series of questions and create a plan and quote premiums that match the policyholders needs.

But will consumers like this? Surely, they won’t trust a bot for something so important? Well, research shows they’re perfectly fine with it: 74 percent are willing to receive computer-generated advice about the type of insurance to purchase, 78 percent about investment asset allocation, and 68 percent about retirement planning.

Stats shows most consumers are willing to receive computer generated advice about their financial investments
Research by Accenture

Besides, real-life examples are at hand. One of the largest insurance providers in Ireland, AA Ireland, increased quote conversions by more than 11 percent and decreased agent handling time by 40 percent thanks to their bot. And there are other examples, too.

insurance chatbot example by Lemonade
Maya, the chatbot of insurer company Lemonade crafts personalized policies

5. Send notifications

According to the Accenture research above, customers want relevant, real-time alerts. For example, 68 percent of those with home insurance want mobile alerts about potential fire, smoke or carbon dioxide hazards, while 64 percent of those with auto insurance want real-time notifications when they enter dangerous driving routes. 

Insurance chatbots can take care of these alerts. If they’re deployed on a messaging app, it’ll be even easier to proactively connect with policyholders and notify them with important information.

Other useful notifications include alerts when policy renewal time is coming up. The bot can send a renewal reminder and then guide the policyholder easily through the process.

Everything you wanted to know about chatbots

Get our complete guide to learn what makes a successful chatbot and how to implement your own.

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What to ensure

If you want to give insurance chatbots a try, consider:

  • Software. You need a platform that gives you the tools to make your bot effective. This means ways to build conversation sequences (e.g. assigning answers to specific questions) as well as deploying it online. Acquire software helps you build chatbots, either via the platform itself or via integrations with services like IBM Watson that help power up the bot’s intelligence.
  • Solutions. If you want to start small, consider which solutions you should prioritize. For example, Zurich UK found that the “claims teams expressed the strongest demand for a chatbot solution,” and that’s why their chatbot focused there. Your needs may be different. Check with internal teams and listen to your customers to plan your course of action.
  • Chatbot scripts. The better scripts you build, the more questions your chatbot can answer, and the more helpful and pleasant the interactions will be. Make sure you write some personality into your chatbot, too, so it stands out while remaining representative of your brand.
  • Feedback. As with all applications, insurance chatbots will go through a testing and refining phase. Keep your ears open for the policyholders’ opinions on how they find interacting with the bot and what they’d like to see more of. A chatbot powered by AI even has the ability to continuously learn and improve via its interactions.

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