Tag Archives: chatbots

New Digital Communications

The options for digital communications keep expanding. Insurers’ mobile interactions with prospects, producers and policyholders have become common, while methods like e-mail and web portals are extensively used. Now, there is a whole new world of messaging platforms, chatbots, business texting, voice assistants and more.

All of these methods are in widespread use in the world today, but not necessarily in insurance. Which methods should insurers employ, for which types of interactions and for which constituents? 

These are important questions because many insurers have expended considerable effort and money to implement various newer communication technologies only to find that the take-up was low. There are no magic answers, but the key to success lies in taking an outside-in approach.

Traditionally, system have been designed from an inside-out approach – taking into consideration the organization, products, IT systems and channels to reach out to external parties. These are critical factors, to be sure. But the better approach is to lead with an understanding of customer needs, customer journeys and the value that customers place on specific capabilities.

This requires more than just asking customers what they want. Whether the party receiving the communication is a prospect, producer, policyholder or even an employee, it is best to gain a more thorough understanding of segments, relationships and needs.

During our recent Digital Communications Virtual Event Experience, SMA asked insurers about their interests and objectives for digital communications, with nine possible responses. The top two choices were overwhelmingly 1) that digital communications are a vital part of the overall digital transformation strategy (83%) and 2) that digital communications will improve the customer experience (75%). Forty percent said reducing internal operational expenses was a key goal. Surprisingly, expanding capabilities for policyholders was way down the list, and expanding agent capabilities was even lower.

Incorporating new communications into the overall digital transformation and improving the customer experience are admirable goals. But it seems to me that, to achieve those goals, it is critical to provide agents and policyholders with new capabilities.

This doesn’t mean just throwing out a new option like a chatbot because others are doing it, and because it seems like a good idea. Decisions should be made in the context of an overall assessment of agent and customer needs.

Insights from three lenses should be used to inform the decisions on specific technologies and use cases. First, look at what interaction methods people are actually using today and throughout the lifecycle. This needs to be done in the context of each segment. Second, do extensive research to determine what new modes people would value for various types of transactions and interactions. Third, evaluate what others in the industry are doing – not just what capabilities they have released but what kind of success they have had (to the extent possible).

See also: The Missing Tool for Cyber Resilience

Finally, be sure to build in flexible configuration capabilities to enable individual users to customize their communication preferences. In the increasingly digital world, placing an emphasis on providing a rich set of communications options is an important ingredient in improving experiences, which leads to both top line growth and profitability.

Expanding Options for Communications

Most P&C insurers have gradually expanded their options for digitally communicating with prospects, policyholders, producers and employees. As the industry moves beyond the web, portals and email, there is a growing recognition that a whole new world of digital communications options can be applied in insurance. Messaging and collaboration platforms, business texting, chatbots, voice, personalized interactive video and even augmented/virtual reality are now on the palette. Add these communication options to the zillion different ways to make or receive a payment, and a great thing happens. These options often simultaneously improve the customer experience while reducing expenses!

Technology options and solution providers are plentiful, but the big question for insurers is how to leverage the right mix of these across the enterprise. There are three really important components for successfully leveraging the new communications options: 1) a digital communications strategy, 2) digital content capture and creation and 3) content management and e-delivery.

Digital Communications Strategy: The methods of communications have often been driven by the requirements of specific areas of the business. Marketing uses a variety of tools and approaches to reach prospects and customers. Distribution uses another set to interact with agents and other partners. Claims has many types of external participants to communicate with during the claims life cycle. Underwriting and other areas of the business have their own needs and favorite technologies. But, now that digital transformation is accelerating, a comprehensive digital communications strategy is needed to determine how and where to best leverage capabilities like chatbots, messaging platforms and other tools. The capabilities for delivering customer documents and communications via email, portals and other traditional methods will continue to be equally vital.

See also: Will COVID-19 Be Digital Tipping Point?

Digital Content Capture and Creation: Inbound communications, such as submissions or first notice of loss, benefit from intelligent capture solutions that can efficiently gather and organize the information sent to insurers. Also, the ability to create and manage forms, documents and customer correspondence is essential. Communications that are created must adhere to branding guidelines, enable regulatory compliance, provide a modern customer experience and have the flexibility to support today’s array of outbound channels (including print and digital channels).

Digital Content Management and E-Delivery: Managing the digital content used for customer communications is an important capability. Insurers must be able to efficiently create, store and (re)use content objects such as visual branding elements, signatures, text blocks and the templates that they support. Moreover, in a world of many digital delivery options, the digital communications platform must support the delivery to the recipient through any technology option or channel, including messaging platforms, business texting solutions and chatbots, as well as traditional print, email, the web or mobile.  

Traditional options for communicating (such as portals, email and even print/mail) are not going away. But establishing a digital communications strategy and implementing a platform solution for creating and managing those communications is even more important in an era where the world is more rapidly shifting to digital due to the pandemic and work-from-home environments.

Realistic Expectations for Insurance in 2020

Visualize a meter that ranges from No Change (1) to Total Transformation (10). I expect the actual changes to the 2020 Insurance Industry meter to register somewhere between 1 and 2.

Thinking about insurance industry trends for the next year was always a fun exercise whether I was at the META Group, Financial Insights (IDC) or Ovum (now Informa Tech, I believe). Each trend captured the opinions from our team of technology-focused insurance industry analysts concerning what we thought would occur over three to five-plus years for each specific issue. Once the trends were finalized by the team, our trend report drove a significant part of our research agenda for the following year.

Instead of trends, I decided to publish my realistic expectations for the 2020 insurance industry:

  1. The League Tables (ranking of insurance carriers) for each major insurance line of business will look the same at the end of 2020 as the tables look at the end of 2019.
  2. There will continue not to be any (statistical or otherwise meaningful) correlation between investment levels in startup insurance firms and any measurable impacts on incumbent insurance firms specifically or the insurance industry generally. (Hype does not equal reality regardless of how much PR digital ink is spewed by the startups!)
  3. Insurance firms will continue in their grand tradition of exhibiting “magic bullet” syndrome: believing that the latest technology or technology application can resolve their major business objectives and can be implemented by using minimal company resources.
  4. Insurance firms, particularly in the U.S. and Europe, will continue to struggle to rationalize the large multiplicity of each of their core administration systems (i.e. policy administration, billing, claims management systems).
  5. Independent agencies (and broker firms) will continue to sub-optimize their operations by not acting in the reality that they are joined at the hip with each of the carriers they conduct business with.
  6. Although insurance firms will continue to recognize the absolute criticality of data, the firms’ various data elements will collectively behave more like useless sludge than a clean and useful resource.
  7. The lack of clean, standardized data will continue to hinder (stop?) insurers from successfully deploying customer-facing (and other market-facing, including producer-channel-supporting) initiatives.
  8. Most insurers will continue to give lip service to providing world-class customer service.
  9. The number of independent insurance agencies and insurance broker firms will continue to decrease as M&A continues in the producer channel, but the number of agents/brokers will remain stable.
  10. 5G, immersion technologies (AR and VR) and enterprise streaming will join the never-ending parade of technologies/technology applications in 2020, already chockablock with other “supposed insurance firm immediately must haves” that include leveraging social media, offering increased functionality on mobile devices, virtual agents/chatbots, interactive video for client onboarding and customer service, IoT, big data, cognitive computing, deep learning and machine learning – all of which technology firms will use as door openers as they reach out to insurance CIOs and CTOs.
  11. Cyber risks will continue to cascade through any device connected to the Web used, owned, leased or otherwise in the possession of society (families, individuals, businesses, federal/state/local governments and the military) adding more pressure on insurers to decide whether or how to profitably offer protection or services.
  12. I’ll continue to hope, in vain, that increasingly more insurance firms will realize the importance of using geospatial solutions as critical components of decision-making, whether the geospatial data comes from terrestrial or Earth Observation sources.

See also: Are You Ready to Fail in 2020?  

Integrating Chatbots, Policy-Handling Apps

Insurers can leverage chatbots to improve a number of customer journeys, including operational processes such as claims first notification of loss, and processes related to the purchasing of insurance products, such as quote and buy. This article covers recommendations related to the latter, specifically focusing on best practices in integrating chatbots with insurance policy-handling applications.

Two initial considerations may be relevant.

First, will the chatbot journey be a sub-journey within a channel, or a net new channel?

Sub-journey within a channel: If the entrance point to the chatbot conversation is contained within the insurance platform’s front end, existing for example as a button on a web page, then the chatbot solution may not attract extra traffic and will effectively be a sub-journey contained within an existing channel.

Net new channel: If the entrance point to the chatbot conversation is outside of an existing channel, for example via Facebook, then the chatbot may generate new traffic, potentially adding significant value.

Second, will the chatbot journey replicate an existing journey, or will it be a net new journey?

Replicate an existing journey: The chatbot asks the same questions in the same order as they are asked in the journey being replicated. For example, if the journey being replicated is quote, then the chatbot asks the same questions as the quote web journey in the same order.

Net new journey: The chatbot asks questions different from those asked in other journeys, or asks the same questions in a different order. For example, a quote-and-buy chatbot may be built to ask different questions or use a different tone of voice depending on responses input by the customer, such as age or location. This provides a customer experience that is truly different from that of other channels, potentially engaging different audiences.

Beyond the initial considerations, it is important to analyze in depth the architecture of the platform into which the chatbot solution is to be integrated. Key areas to cover:

  • Insurance policy-handling application: What data does the policy system expect at the end of the chatbot journey? For example, if the chatbot replicates a quote journey, what data does the policy system require from the chatbot to convert the quote into a policy?
  • Integration layer: Is the existing integration solution fit for purpose, or should a new solution be defined addressing how to pass data between the chatbot, the policy-handling application and any relevant near and downstream applications?
  • Management information (MI) solution: Does the policy handling platform have an MI solution, and is it feasible to use that MI solution to gather data relevant to the chatbot conversation? For example, a platform may have an MI solution, but a decision may be made to use the analytics produced off the back of the chatbot to gain a more granular view of the conversation.
  • Billing application: Are there integrations between the core policy system and the core billing system that could affect the chatbot solution? For example, if the chatbot conversation collects data that needs to land in the billing system, the format in which the data is collected must comply with the billing data model.
  • Near-stream/downstream applications: Are there applications that consume data from the core policy system that could affect the chatbot implementation? For example, there may be a documentation system that the chatbot needs to integrate into.

See also: Chatbots and the Future of Insurance  

After the architectural issues, consider the overall response times of the chatbot, which have a significant impact on the user experience. Key points:

  • One question at a time – the implications: Whereas in web journeys customers can see a number of questions at the same time, and as such have something to read and engage with if the response to their inputs is slow, with a chatbot questions are presented one at a time. The outcome is that when a customer is engaging with a chatbot, and the chatbot response is delayed, the customer can do nothing but wait, which may lead to a poor customer experience.
  • Minimizing chatbot response times: An approach to minimizing response times is to build a skeleton proof of concept (POC), then test response times using the POC. A second approach is to perform performance profiling, where speculative analysis is done upfront to model how long each transaction will take. For example, knowing that a rating call made from the policy handling application takes circa one second, it can be estimated that the same called made from the chatbot will take circa one second, too. The combination of early modeling and POC should avoid the situation whereby performance issues are baked into the chatbot solution through architectural decisions that are hard to reverse.

Analysis should be done on the look and feel of the chatbot. The two main options are to have the chatbot conversation align with the look and feel of the other customer-facing journeys, or give the chatbot a look and feel distinct from all other journeys. A key disadvantage of the latter approach is that customers, not recognizing the look and feel of the chatbot, may think they landed on the wrong website or, even worse, on a phishing platform. Points that should be considered are:

  • Location in journey: If the platform’s front end indicates to users where they are in the journey, for example highlighting that a user has answered nine of the 12 questions required for a quote, does the chatbot do the same?
  • Forward and backward navigation: Is it possible to navigate forward and backward in the chatbot conversation? For example, a chatbot conversation could be built so that questions A, B, C can only be asked once and in order, or could be build so that the customer can navigate both from A to B to C and from C to B to A. If the second, then care should be taken to ensure that answering again previously answered questions does not cause issues with near-stream and downstream application.
  • Multi-device look and feel: Is the chatbot look and feel consistent across devices? For example, a chatbot that is built to replicate the look and feel of the underlying policy-handling application will need to maintain that consistent look across web, mobile and other customer devices.

Once deployed, a chatbot coupled with a feedback-gathering and -reporting framework can help uncover insights about customer journeys. For example, web forms do not analyze what the user is doing between when the web page is loaded and the click on the submit button, but chatbots do. Chatbots can help uncover:

  • Conversion rates per question, allowing local optimization.
  • Net Promoter Score (NPS) for the insurance brand delivering the product.

Each optimization derived from the learning may not be significant on its own, but the sum of all optimizations can lead to significant improvements for the overall journey. Furthermore, because, on average, chatbots can be improved once a month, the result is a learning curve with a faster acceleration than traditional web forms.

See also: Chatbots and the Future of Interaction  

Key Takeaways:

  • Defining whether the chatbot conversation will be a new channel and whether it will replicate an existing journey helps in defining the overall chatbot use case.
  • It is good practice to analyze in detail the application architecture into which the chatbot is being implemented, focusing in particular on the core insurance policy application, integration layer, MI solution, billing application and near-stream/downstream applications.
  • The time it takes for the chatbot to respond to user inputs is particularly important, as chatbot journeys display one question at a time.
  • It is helpful to define upfront whether the look and feel of the chatbot conversation will mimic the look and feel of the other customer-facing channels.
  • An implemented chatbot can be used to uncover insights about customer journeys, especially with regard to conversion rates and NPS scores.

Chatbots and the Future of Insurance

The future of the insurance industry is the customer. More and more insurance companies are stepping up their games and moving to digital and customer-centric strategies.

The push to position the customer at the forefront of the industry is driving the adoption of self-service technologies — digital offerings capable of delivering more user-friendly customer experiences. In turn, the industry is embracing another customer-centered technology: chatbots.

But important questions remain:

  • How will chatbots solve historic industry pain points around customer service?
  • How can humans and chatbots work together to improve the customer experience?
  • In what ways will chatbots change the insurance industry over the long term?

By answering these and other questions, the insurance industry can better leverage chatbots to improve the customer experience —and prepare for the changes ahead.

Chatbots: Why now?

Until recently, customer service has been frequently discussed but rarely prioritized in the insurance industry. Traditional customer-facing processes rely heavily on phone interactions and fall short of customers’ digital expectations.

Although some insurers have reduced the tedium of traditional processes, customers frequently experience long wait times and multiple touchpoints for a single action or request.

Taking a page from the e-commerce playbook, leading insurers are empowering customers with self-service capabilities, which augment the work of employees and agents, allowing them to focus on more meaningful customer interactions.

See also: Will Chatbots Take Over Contact Centers?  

Chatbots are a natural extension of the push for self-service capabilities. They improve the customer experience through a cooperative approach involving both humans and artificial intelligence (AI). The timing is right for the widespread adoption of chatbots.

Just 34% of consumers report they have definitely not interacted with a chatbot in the past year.

By making it easier for customers to answer common questions and perform routine activities like filing a claim, chatbots reposition customers at the center of insurance processes.

How chatbots improve the customer experience

Retail and other sectors have successfully used chatbot technology to significantly enhance the customer experience. However, the buying and claims processes in insurance present unique challenges. Insurance customers purchase policies because they are afraid of losing things they care about: cars, houses, even loved ones. As a result, customers are more emotionally invested when buying insurance than when they purchase consumer goods or even big-ticket items like vehicles.

Chatbots help neutralize emotions during the transactional stages of the insurance lifecycle. In some ways, chatbots are an extension of a web search. The difference is that they go deeper and present customers with information that is otherwise difficult to access. Chatbots also streamline routine tasks, eliminating the frustration policyholders commonly experience when dealing with insurers.

Consumer acceptance of chatbots is largely predicated on the availability of human interactions for certain tasks. Nearly half (49%) of consumers feel better about using chatbots if they know they can escalate the experience to a human interaction.

The ability to defuse the emotional element of buying insurance accelerates the speed of doing business. In addition, agents and customer service representatives no longer have to perform transactional processes, which improves their quality of life in the workplace and leads to a faster pace of service and internal transformation.

There are limits: At some point, humans must engage customers directly and assist them with the emotional aspects of the insurance process. Still, with today’s most advanced chatbots, there is the potential to capture new insights and further improve the policyholder experience through personalization. For example, when a customer prices flood insurance, chatbots with AI running in the background can quickly identify the best and most affordable coverage for her situation.

Insurance customers have grown to expect this level of personalization from retailers and consumer-facing brands. As AI-powered chatbots gain traction, customers will expect the same from their insurers.

A look ahead: What’s next in chatbots for insurance companies?

Chatbots will have a transformative effect on the customer experience, but benefits may vary by insurance category.

Chatbots provide an opportunity to reimagine the role of health insurance and position health insurance providers as true partners in the quest for better patient outcomes. For example, chatbot solutions can provide free/low-cost health coaching or other services.

See also: Chatbots and the Future of Interaction  

In life insurance, chatbots enable insurers to build on existing trust and serve as wellness partners to their customers. Leveraging AI, chatbots can deliver personalized recommendations that improve customers’ quality of life by promoting financial, physical and emotional wellness.

Similarly, chatbots have the potential to generate added trust with property and casualty insurance customers. With advanced analytics, chatbots can improve how customers price insurance policies or streamline the claims process. When combined with IoT devices, chatbots may even be able to provide real-time analysis, enabling customers to prevent incidents like a leaking hot water heater or a pending part failure on a vehicle.

By focusing on customer needs, chatbots not only strengthen policyholders’ relationships with their insurers but also drive sales through touchpoints that span a range of digital channels. Humans remain a vital part of customers’ experience with insurers, but, with chatbots on the team, human agents and customer service representatives have the freedom to focus on more meaningful aspects of customer relationships — a big win for customers, employees and insurance companies themselves.