AI Disruptions in Insurance
Two months ago my auto insurance premium doubled.
My daughter had just started driving and I decided to add her to my policy. After getting over the sticker shock and finishing up with the process, I started wondering what her experience will be when she does this herself.
Will she shop around via search, ask her friends or just ask me what she should do? While I know she’s young and unconcerned right now, it does seem like an ideal time to begin educating her.
No, not me. But the insurer.
I can imagine a social media nurturing strategy or a mobile app with a virtual concierge offering tips and answering her questions. Insurance isn’t something easy to understand. And as we think about AI we need not just about technology and cutting costs, but its ability to serve the consumer on their own terms and in the places they live, learn, and socialize.
But let’s divert from my personal story to the bigger picture of how AI is disrupting insurance and what executives can do about it.
The Insurance Customer Experience with AI
Insurance may not be the most thrilling topic to discuss, but for many of us, it’s a necessary part of life. Whether it’s for our car, home, or health, we all want to make sure we’re protected in case of emergencies. However, the process of getting insurance and filing claims can often be a headache for many customers. That’s where AI comes in, it aims to make the customer experience smoother and more efficient. AI-powered chatbots can answer customer questions and guide them through the process, while machine learning algorithms can analyze data and provide personalized recommendations. As technology continues to advance, it’s exciting to see how AI will continue to enhance the way we interact with our insurance providers.
(Disclaimer… I do think the term ‘AI’ is often misused or inaccurate. Better better terms are often ‘machine learning’ or just a ‘large language model’ based solutions. However, for the sake of simplicity and consistency, I’ll continue to use ‘AI’ in this article… and sometimes going with LLM. )
-ARVL
How AI Brings Greater Personalizations
As technology continues to evolve, so do our expectations as consumers. We want instant gratification, personalized experiences, and seamless interactions. In this context, artificial intelligence (AI) has emerged as a game changer, transforming the way businesses interact with their customers. Through AI-powered tools such as chatbots, virtual assistants, and recommendation engines, companies can now tailor their interactions to individual needs and preferences, making the experience more relevant and engaging. Whether it’s suggesting products based on past purchases or having a virtual assistant guide you through a complex process, the use of AI in customer interactions is rapidly becoming a necessity in today’s market.
How AI-driven Bots are Changing the Way Customers Interact with Insurers
The world of insurance customer service is undergoing a major transformation, thanks to the rise of AI-driven bots. These systems are changing the way customers interact with their insurers, making the experience faster, more efficient, and more personalized than ever before. With the help of conversational AI, customer data can be quickly analyzed, identifying potential issues and offering tailored solutions. This means that customers can get the help they need in real-time, without any hassle or delay. As AI technology continues to evolve, we can expect insurance customer service to become even more responsive and user-friendly, improving satisfaction for both customers and insurers.
Advantages of Large-Language Models (LLMs)
In today’s fast-paced business world, understanding your customer’s preferences and needs is essential to success. Using LLM technology can assist you in doing just that, giving you the ability to seamlessly analyze large amounts of customer data to gain valuable insights. One of the main advantages of this approach is its ability to learn and adapt to changing trends and behaviors. It can help you identify buying patterns, preferences, and needs, which can be used to personalize your marketing and offer more targeted recommendations. By leveraging a pre-trained LLM, you’re able to make more informed decisions that can drive increased customer satisfaction and loyalty.
Challenges Faced by Insurers in Adapting
The insurance industry has entered an era of rapid transformation due to technological advancements, evolving customer expectations, and increased regulatory oversight. Insurers are grappling with the challenge of adapting to this new landscape while remaining profitable and competitive. Key issues include leveraging digital platforms to better target and retain customers, investing in innovation to boost operational efficiency, and navigating growing regulatory requirements. Despite these challenges, insurers have a unique opportunity to improve the customer experience, increase agility, and develop new revenue streams. The key to success lies in embracing change and adopting a customer-centric mindset.
Best Practices for Leveraging AI Technology
By leveraging the power of AI, insurers can quickly and efficiently handle customer queries, provide personalized recommendations and improve their overall services. One of the best practices for using AI technology in insurance is to gather as much customer data as possible. By analyzing this data, insurers can gain valuable insights into customer behavior and preferences, enabling them to tailor their services to meet individual needs. Additionally, by using LLM-powered chatbots, insurance companies can provide round-the-clock customer support, ensuring that customers receive the help they need when they need it. With the right best practices in place, AI can revolutionize the insurance industry and take customer experiences to the next level.
The use of generative AI in the insurance industry claim to bring a more personalized customer experience, however, we find it’s best to restrict generative AI to content only and not conversations. Conversational AI has the ability to enable faster response times and generally higher satisfaction ratings.
With the recent shift from human-led interactions to AI-driven bots, many insurers have found success in using this technology to enhance the customer experience. It is essential that insurers leverage the potential benefits of AI while simultaneously recognizing the challenges that come with adapting to these changes. Working to identify and implement best practices when it comes to AI technology is vital for ensuring customers receive seamless experiences. With a clear understanding of customer needs and preferences, using generative AI can be a powerful tool for improving customer experiences in insurance.
Conclusion
As we are all witnessing the disruption that generative AI is bringing to the world, there still remains a gap in understanding the applications of non-generative LLMs and how they can advance company adoption without the risk of falsely generated responses.
In the article, Leveraging AI in Insurance, McKinsey Partner Violet Chung shares insights and trends that insurers need to be aware of. While she shares four broad ways to being adopting AI, I find that most executives are missing the low-hanging fruit of simply conversationalizing their content and improving AHT for agents.
At Knowbl, we have begun to pilot large-scale projects with global insurance brands by focusing on accelerating the usage of existing knowledge that is typically hard to find. This we find is an ideal project to start adopting and leveraging AI with minimum infrastructure costs or changes. If your organization would like to speak with Knowbl about your unique situation, please schedule a call today with us today.
