AI Chatbot For Insurance: Benefits, Use Cases, and Key Features

The insurance industry is frequently thought of as having old procedures, tonnes of paperwork, and complicated concerns. So how is AI chatbot for insurance affecting the insurance industry?

You might be excused for believing that the sector doesn’t have much potential for digital transformation. However, innovation is necessary for every sector of the economy. Those that don’t ride the wave of innovation may find themselves struggling for existence as market demands set new norms.

In several industries, changing customer expectations have altered corporate practices. Customers now have more options than ever due to the increasing competition among businesses.

According to an Accenture study, 74% of individuals would be open to purchasing insurance from non-insurance providers. An insurance company’s services and products no longer suffice to set it apart. Customer experience is a brand distinction that shouldn’t be ignored.

New customers who are digital natives and have high expectations for how a business handles them have emerged due to generational shifts. Given that one-third of customers said they would think about switching firms after just one instance of subpar customer service, these expectations shouldn’t be taken lightly.

Additionally, Covid-19 has heightened the necessity of offering competent customer service to clients who are confined at home while also overcoming the difficulty of not being able to access workers.

Support centers are typically used to address client needs.

However, because staff cannot be contacted to answer calls, these are not only expensive but have also nearly wholly become obsolete. Additionally, the sheer volume of consumer demands necessitates scalable customer service that can cater to these needs around-the-clock, in many languages, and across various digital channels while ensuring individualized interactions.

These requirements are reasonable. Conversational AI is the already-existing solution to these needs.

AI chatbots could transform insurance companies.

Imagine an insurance client searching for a policy quote on their mobile phone late one night while locked at home. A chatbot popup that shows before the in-page search engine asks the user if they need any assistance.

Some clients might be hesitant to move forward.

Many chatbots can be annoying since they can only respond to FAQs and frequently stall when a discussion somewhat deviates from its intended course. The finest solutions for insurance chatbot would be able to carry on a conversation with the consumer using natural language, guide them through the entire process, and offer tailored suggestions to reduce the price. Like in the case of dog insurance where the chatbot can help to understand the coverage for different breeds of dogs, provide information about the pre-existing condition coverage and assist with claims, etc.

Providing omnichannel, 24/7, and multilingual support are just a few of the apparent advantages that sophisticated conversational AI chatbots for the insurance industry can offer. These features help to create exceptional, high-quality customer experiences.

Although numerous insurance companies have mobile apps to help their clients, these are fairly limited. Customers have reported being unable to carry on conversations across several channels, such as moving from their mobile phone to their smart home device, because these apps are typically only accessible via one or two media.

Many mobile apps also fall short of offering comprehensive support. Users must inevitably reach a website or call center to finish their operations, where lengthy wait times, time constraints, and language barriers can frequently be a major pain. Getting the precise information a consumer needs on these platforms might be challenging.

Because of this, AI chatbots in the insurance industry have shown to be the greatest way to improve the user experience while cutting expenses.

While acting as a listening channel that offers useful data to understand consumer behavior and preferences better, chatbots enable customers to manage their insurance claims swiftly and effectively.

This data enables insurance companies to provide individualized services and improved quote suggestions that take into account the requirements of each client. Customer service efficiency determines how likely human error is to occur as well as how much money may be saved on operating expenses.

An insurance cost savings of over $1.3 billion across auto, life, property, and health insurance will be realized by 2023, up from $300 million in 2019, according to a Juniper Study. This is a differentiating characteristic that enables insurance companies to maintain their leadership.

Insurance Industry Chatbot Use Cases Improve Customer Support

While most customers don’t necessarily want to get insurance, they do so because they know they must. To ensure that any alterations are not viewed as an additional burden, insurance companies must be ready to support clients in performing end-to-end seamless processes in a friendly and secure manner.

Offer individualized guidance and cross-selling

67% of people who have car insurance, according to Accenture, are willing to share information in exchange for changes to their insurance rates depending on usage.

The ability to offer better discounts and guidance on quotas and insurance claims is the benefit of gathering client feedback. Chatbots can generate individualized recommendations by monitoring client behavior and habits.

Avoid fraud

Security and privacy of consumer data are the responsibilities of insurance companies. Chatbots are effective at keeping an eye out for and spotting symptoms of fraudulent conduct, and they can notify both the consumer and the insurer.

Controlling internal operations

Staff can concentrate on improving their abilities or handling more complicated back-office processes by leveraging automation to speed up repetitive chores.

Main Characteristics of an Insurance Chatbot

Although many businesses have used chatbots for insurance, not all are up to par. They can be difficult to use and have limited capabilities. Customers still wind up speaking to live agents in the end.

The best virtual assistants go beyond a FAQ chatbot’s capabilities and offer advice. To achieve this, they need to thoroughly understand the services the company offers and the specifics of life, car or jewelry insurance, etc be able to learn from actual data, and be able to communicate with clients as a human would.

They must possess the following qualities:

  • Conversational

The most natural type of human communication is conversational speech. When humans and bots interact, the use of distinct languages, formal or informal, must be considered.

There should be no reason a chatbot cannot comprehend the phrase “my son broke my window” when a damage claim is being made. Contextual awareness is a requirement for virtual assistants. A chatbot should be able to understand it if an insurance advisor can.

  • Transactional

A chatbot that is unable to perform actions is of little use. We want actions to be taken, quotas to be delivered, claims to be signed, and accounts to be opened when we speak with an insurance advisor.

A virtual assistant must accomplish the same tasks. Robotic Process Automation, which connects them to the business’ back-office systems, can help them achieve this (RPA).

It’s crucial to look for chatbot platforms that can be quickly coupled with internal and external systems because not all technologies on the market use these intricate integrations.

  • Reliable 

Reliable Insurance companies are necessary to gain their clients’ trust. This goes beyond the technologies they employ. Errors in transactions or interpretation are unacceptable and may result in a client’s loss.

Conversational AI chatbots need to establish their reliability.

  • Multi Channels

Chatbots that support many channels can be used. Customers can use this to carry out procedures through the medium of their choice, whether it be a phone call, smartphone app, smart home device, or messaging services like WhatsApp or Skype.

  • Secure

Secure Customers respect their privacy and data. 40% of respondents cite data protection as a critical factor in their confidence in their insurers.

Therefore, conversational information must be incorporated into a centralized authentication system which may use methods like JSON web tokens and is inaccessible to third parties.

Regulations like the GDPR (General Data Protection Regulation) must be complied with by technologies, allowing conversations to be examined, retrieved, made anonymous, encrypted, or deleted as needed.

Chatbots can boost brand engagement and customer loyalty while bringing down expenses and boosting profits. However, they must interact with clients in a natural and desired manner if they want this to happen.

Therefore, success in the insurance industry depends on selecting the best development bot platform to deliver ideal conversational qualities that are trustworthy and scalable.


  • Alishba Memon

    Alishba Memon is a content manager at Botsify. She is a staunch believer in the theory of making anything happen. She specializes in SEO writing and content writing. She aims to spring up in a pragmatic way.

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