The insurance industry has steadily been digitizing in recent years. It is taking advantage of technological developments in automation, offering apps to clients and introducing things like electronic proof of auto insurance.
PwC’s Annual Global CEO Survey in 2020 identified customer experience (CX) and core tech transformation as the top two opportunities for companies to set themselves apart, with CX significantly ahead. When customers are communicating with their insurance company, they are usually dealing with an awful experience (a car accident, a medical issue, a home invasion, a roof leak or a full-on natural disaster). Hitting any snags when it comes to getting the service they need is a big factor in driving them to a competitor.
Artificial intelligence (AI) addresses both customer experience and tech transformation and has helped insurance companies improve their services and stay competitive in a tough industry. AI enables many services and processes to be automated, resulting in both cost and time savings. But AI deployment also benefits customer experience, in three specific areas.
Improvement of policies, products and processes
The retail sector has capitalized on custom products and experiences, and the concept that one or two sizes will fit everyone is fading quickly in other sectors, too. The insurance industry is now also latching onto customization, as AI enables companies to leverage data to personalize a core product for an individual customer.
A company’s AI model can use a client’s historical data to calculate with a high degree of probability that a particular product or policy will be the best fit. In the eye of the customer, they get an attractive product without needing to spend a lot of time on consultations with the broker. For the insurance company, the efficiency gains are impressive, and agents don’t need to spend a lot of time finding the right product for the client.
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Not only does AI improve the speed of crafting policies for customers, the technology can also speed up underwriting, as well as the claims process — two key touchpoints where turnaround time is essential for CX. If a health insurance customer is filing a claim for an expensive prescription, they will want a simple and quick resolution. Long waiting times may drive them to a competitor known for quicker reimbursements. But AI can bring a competitive edge to an insurance company if customers know they can expect trouble-free claims processing.
Enabling rapid online assistance
The days of customers playing phone tag with agents to get the information they want are long gone. Insurance companies can leverage AI on their platforms — both web and mobile — to allow customers to quickly find an answer to a question. The ability to more easily respond to inquiries from policyholders is especially important following a major event, such as a tornado or hurricane, when there is sure to be a high-volume of online interactions.
AI-powered chatbots have become the first touchpoint for customers in many sectors. When done right, they can give a major boost to an insurance company’s customer experience. Organizations can also save money by automating simple and routine online customer interactions, leading to another win-win situation where customers can quickly get to the information they need.
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Using AI to test AI models
Once an insurance provider has an AI model in place to help with the crafting of policies and settling of claims — and the organization begins using it as an integral part of its daily routine — it is vital that the AI model suitably addresses four risk factors: accuracy, stability, flexibility and ethics. AI can be used to test these models against those factors.
Any AI model an insurance company employs should have a high accuracy score. Smart AI model testing will ensure that the results are reliable — with an agreed tolerance for the model, to protect a company’s profitability while appropriately managing their risk. Because data changes over time, testing will ensure that an AI model remains stable when there’s a change in the data in the ecosystem, or in the way the insurance company handles business. Such testing will also ascertain that the model is flexible enough to react to those changes while remaining accurate.
Above all, AI can be used to test whether the insurance company’s AI models are ethical — meaning that they are not biased toward or against any specific groups of society. Even the largest dataset imaginable can be flawed or biased depending on the data that is included. Therefore, it is vital that these models be tested on a regular basis, to verify that the risk factors are being appropriately applied without bias, ensuring the company’s reputation and its brand.
Giving customers a reason to stay
As the saying goes, it’s cheaper to retain a current customer than to attract a new customer, so insurance companies need to look at technological innovations that can improve customer retention. By recognizing the value AI can bring to all aspects of the customer experience, insurance providers can deliver fast, accurate and fair service to policyholders.
Whether a business provides health, car, home or other types of insurance, there will always be a line of competitors just waiting to snatch away disappointed and frustrated customers. What’s most important is for insurance companies to focus on giving customers reasons to stay.