How to Enhance Customer Service

Chatbots add support and engage consumers without the need for additional staffing, freeing human resources for higher-level tasks.

Many insurers — especially regional players with deep ties to their local community — stress that customer service is a key differentiator for their business. Novarica’s position has always been that customer service and technology are not tangential, but rather they are one and the same: having quick access to agent and policyholder data, quoting and binding in real-time, and generating recommended contact opportunities are examples of the kinds of technology-enabled capabilities that take customer service to the next level. But key to providing great customer service is recognizing how customer expectations have changed in the last decade. Insurers must be ready to engage with consumers when and how they want across multiple channels for engagement. This has put considerable pressure on the insurance industry to figure out how to model themselves after other tech-driven industries in an affordable and scalable way. In the last year, chatbots have emerged as a viable option due to their ability to enable rapid customer service across a variety of low-touch applications 24/7. Moreover, chatbots are able to provide an added layer of support and consumer engagement without the need for additional staffing, freeing up human resources for higher-level tasks. See also: Chatbots and the Future of Interaction   Insurance use cases for chatbots include first notice of loss (FNOL), claims self-service, customer policy applications, policy endorsements and support, and agent interaction. These are great opportunities, not to replace other modes of interaction, but to supplement them for off-hours or for consumers who prefer a chat over a phone call. But chatbots are only as useful as the existing back-end functionality that supports them, and insurers can’t slap a chatbot interaction into their website or mobile app if they don’t also enable their core systems to provide real-time status updates or quotes via a web service. Just because a chatbot understands a user’s question doesn’t mean it can respond if the information isn’t available via machine, and an unsatisfying chatbot interaction is worse than none at all. The quick evolution of chatbot technology is a great option for a new channel, but it doesn’t let insurers off the hook to modernize and service-enable their entire infrastructure. Moreover, as discussed in a recent blog post on Progressive’s new chatbot, Flo, insurers need to understand appropriate use cases for chatbots: while some self-service functions are ripe for chatbot usage, others may require empathy that an algorithm can’t provide. The submission of a claim is often triggered by a traumatic life event for the consumer, such as a car crash or illness, instances calling for a human touch. For this reason, it is unlikely chatbots can completely replace human agents capable of offering empathy and reassurance to their customers during heightened emotional crises. As with any emerging technology, insurers should have specific, targeted use cases in mind for their initial implementations. Even if the end goal is to have chatbots available across all modes of support and service, such strategic projects start best with tactical investments. For more on this, see my recent brief, Chatbots in Insurance: Overview and Prominent Providers.

Jeff Goldberg

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Jeff Goldberg

Jeff Goldberg is head of insurance insights and advisory at Aite-Novarica Group.

His expertise includes data analytics and big data, digital strategy, policy administration, reinsurance management, insurtech and innovation, SaaS and cloud computing, data governance and software engineering best practices such as agile and continuous delivery.

Prior to Aite-Novarica, Goldberg served as a senior analyst within Celent’s insurance practice, was the vice president of internet technology for Marsh Inc., was director of beb technology for Harleysville Insurance, worked for many years as a software consultant with many leading property and casualty, life and health insurers in a variety of technology areas and worked at Microsoft, contributing to research on XML standards and defining the .Net framework. Most recently, Goldberg founded and sold a SaaS data analysis company in the health and wellness space.

Goldberg has a BSE in computer science from Princeton University and an MFA from the New School in New York.


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