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The rise of chatbots in insurance

rise of chatbots

Catering to an array of business needs, chatbots are an integral part of business processes and digital transformation efforts today. Advancements in AI, ML, other cognitive technologies, and increasing popularity of messaging platforms have powered chatbot development. Research suggests that chatbots cut down operational expenses by 30% and Grandview Research estimates that the chatbot market size will reach $1.25 Billion by 2025. 

The insurance sector is one among the many areas that is embracing this technology to further their digital transformation efforts. There are various parts of the insurance process where chatbots can play an important role:

  1. Pre-sales 
  2. Sales 
  3. Customer service 
  4. Back-end services 

Chatbots play a critical role in these areas as they ensure seamless processes that normally require human intervention. What are the benefits?

  1. 24*7 customer service 
  2. Faster processing time
  3. Quicker resolutions 
  4. Higher customer satisfaction  

What makes a chatbot effective?

For maximum value and effectiveness, chatbots are tailor made and not created uniformly across platforms. What makes them useful and successful are their characteristic features that have an impact on both operations and customer satisfaction. 

  1. Conversational maturity 
  2. Backend integration capabilities 
  3. Autonomous reasoning capabilities
  4. Emotional intelligence
  5. Data analytics 

The idea is for them to communicate with customers like humans do. Contextual, intelligent and instinctive conversations across multiple channels is what is expected of these bots from both a business as well as customer perspective. 

Key features of a chatbot 

  • The ability to communicate

Effective communication with the customer is most important. This includes the ability to allow the customer to communicate with the bot through text or voice. Personalization is what everybody is looking for today. So the right language, tone and mood across channels is critical. 

  • The ability to comprehend 

The next step is comprehension. Understanding the context, mood and direction of the customer’s conversation is another essential aspect. These characteristics ensure understanding followed by appropriate responses, driving a human-like conversation. This is where new-age technologies like NLP and analytics come into play.   

  • The ability to collaborate 

The chatbots also need to be capable of interacting with other devices and data sources to be able to deliver a premium experience. These bots must also constantly learn from every conversation, to improve continuously and perform better. 

Chatbots in the insurance lifecycle 

Let’s take a look at the various stages in the insurance lifecycle where bots can be incorporated. 

1. Awareness/pre-purchase stage

 In this stage, bots can be used for lead management, marketing, customer education, FAQs, product recommendations and  personalized quotes. 

2. Engagement and purchase stage 

Assistance during the purchase processes like quote to policy, document uploads and ePayments. 

3. Post-purchase stage 

Customer engagement and service, policy endorsements and query resolution. 

4. Claims 

Claims related information and education, filing a claim, claims processing and tracking. 

Where have chatbots made an impact?

In the insurance value chain, chatbots have been leveraged in various areas of the process. Let’s take a look at the areas where they delivered maximum value.

  • Resolutions and personalization

This is normally where insurers choose to begin experimenting with chatbots. Bots have the capability to address FAQs and specific customer queries. Apart from queries, with the help of the policy repository, they can recommend insurance products that best fit the customer’s requirements, and assist them through the purchasing process as well. 

  • Lead profiling 

Based on the queries addressed, chatbots are also capable of profiling these customers and providing quotes. This enables the sales agents to follow up on these leads accordingly. Additionally, this enables better sales as bots are operational 24/7. If a potential customer approaches an insurer after regular business hours, while they are browsing, they can still interact with the bot and agents can follow up the following day based on the customer interactions with the bot.   

  • Pre-sales

This is one of the high volume areas where there is major customer traffic. Around the clock service reduces human intervention and enables quicker responses. Simple implementation and higher cost savings as it has a direct impact on workforce requirements. 

  • Financial needs analysis 

Analyzing customer needs, chatbots calculate insurance coverage and can estimate monthly rates of plans accordingly, a process that is normally time-consuming and labour intensive. 

  • Claims processing

A process that is normally tedious for both, insurer and customer, with AI-powered chatbots, excessive human intervention is eliminated in claims processing. Customers can report the claim and the bot handles the rest. It first verifies the details of the policy, performs fraud detection and this information is passed on to the insurers to decide whether to reject or accept the claim. This makes the process easy, quick and hassle-free, increasing customer satisfaction by delivering instant assistance. 

What are the benefits of investing in chatbots?

  • Instant support 

To attract, satisfy and retain customers in a highly competitive market, insurers need to cut down on customer wait times. Extended wait times increase the possibility of losing potential customers and chatbots help overcome this as they are easily accessible, anytime, anywhere, and provide instant solutions, providing a better customer experience. 

  • Scalable model 

Customer support teams do have limitations in terms of how many customers they can handle at once and scaling up a team is not a simple or economical task. Chatbots do away with all these limitations as they are automated tools capable of handling countless queries instantly, and there’s no limit on the number they can address at the same time. 

  • Streamlining processes 

Whether it’s queries, quotes, purchase or claims, these processes normally involve too many steps and excessive human intervention, making it a tedious task for everybody involved. Chatbots cut down the number of steps and reduce the number of agent calls by simplifying processes in a conversational manner and providing all the necessary information to the customer. 

  • Customer satisfaction

At the end of the day, this is what’s most important. Unless the customer is happy, sales, retention, profits are not achievable. Chatbots simplify processes, clear confusions and provide a personalised experience for customers, heightening customer satisfaction.   

Chatbots are an emerging trend in the insurance industry as insurers have realised value and are trying to tap into its potential. Keeping up with the growing customer demands and requirements of insurers today, Neutrinos has launched a distribution suite to enable a seamless path to purchase, exclusively for the insurance sector.  One of South Africa’s leading insurance companies leveraged the Neutrinos platform to develop a chatbot solution for real time customer assistance.  The advanced chatbot solution developed by Neutrinos enabled quick response to FAQs pertaining to insurance products and compliance without human intervention, enhancing customer service.   Whether its chatbots, Financial Needs Analysis or SRM, our end-to-end distribution solution helps insurers leverage best-in-class technologies to deliver superior customer service. 

For more information on Neutrinos Distribution Suite, reach out to us today!


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