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Are Insurers Ready for Voice Search?

Who do property and casualty insurance customers turn to when they need help?

In the past, answers have included insurance agents, customer helplines and company websites. Today, however, customers are increasingly likely to consult Alexa, Siri or Cortana.

As voice assistants gain popularity in homes, in cars and on smartphones, they’re also gaining traction as a marketing tool. Here, we look at the ways in which insurance companies are using voice assistants as part of their marketing and sales strategy, as well as what to expect in the near future.

How Voice Assistants Are Changing Marketing

Voice assistants commonly come in one of two forms: wireless speakers that can be placed in the home or office, or as built-in tools on smartphones. iPhones and various Android devices have had them for a few years now.

In some ways, voice assistants work similarly to visual or text-based tools like smartphone apps and Google search bars. The user asks a question or enters a command, and the device responds to it. Voice assistants like Alexa even offer apps, or “skills,” that work similarly to smartphone apps — except they rely on audio rather than visuals to share information, TechCrunch’s Sarah Perez writes.

The audio-based approach changes the ways in which both search results and apps work on voice assistant devices. A text-based Google search, for instance, returns a list of links from which the user can choose. A voice-based search, however, tends to return the single response the AI thinks best fits the user’s query.

Some experts praise this option for its speed and flexibility. “Since voice flattens menus, it will make daily tasks far easier to complete,” Jelli CEO Mike Dougherty says. Yet it also puts additional pressure on marketing teams to ensure that their content gets chosen by the various search engines that inform each voice-based device, says Richard Yao, senior associate of strategy and content at IPG Media Lab.

Voice assistants haven’t just changed how search results are presented. They have also changed how users launch searches in the first place, says More Visibility’s Jill Goldstein. While text-based searches tend to focus on two or three keywords, voice-based searches use full, natural-language sentences. These often start with question words like “what,” “how” or “when.”

See also: Insurtech Starts With ‘I’ but Needs ‘We’  

These questions give marketers insight into where shoppers are in their buying journey and how best to meet their needs — but only if marketing teams are collecting and using this information, says Tyler Riddell, vice president of marketing for eSUB Construction Software.

Not only are marketing teams learning to adapt to the differences between audio and visual, but they’re also learning how to adapt to a search tool that adapts itself.

Because voice assistants use artificial intelligence and machine learning, they can adapt to changes in search terms, says Gartner analyst Ranjit Atwal. The onboard AI is designed to learn over time, gaining a better sense of how users frame their queries and the sort of information they may be looking for.

‘Alexa, Find Me Auto Insurance’: The Rising Demand for Voice Search

Based on recent sales trends, 55% of U.S. households are expected to have a smart home speaker, with voice assistance enabled, in their houses by the end of 2019, Dara Treseder at Adweek reports. Voice assistants are also a mainstay of many smartphones, from Apple’s Siri to Google’s voice search option triggered by saying, “OK, Google.”

Insurance customers increasingly prefer to include digital channels in their search for property and casualty insurance. With voice assistants occupying millions of smartphones and a wide range of other devices, customers increasingly prefer to rely on these tools, as well.

Nearly half (46%) of insurance customers already use voice search tools at least once per day, according to Shane Closser at Property Casualty 360. One in four want their voice assistants to be able to give them more information on insurance agents and products. One in three wanted to use voice assistants to book appointments with a particular insurance agent.

Service-based companies that offer “highly complex and highly personal” services are uniquely suited to thrive in the voice search era, says Adweek’s Julia Stead. While Stead focuses on travel, finance and healthcare, her analysis applies to P&C insurers, as well, because these companies also offer services that have long been accessed via voice (phone), are tailored to the needs of each customer and often require access at odd locations or hours.

And while the conversation about tech innovation often focuses on younger users, voice assistants are increasingly popular with older insurance customers.

See also: Future of Insurance Looks Very Different  

Lauryn Chamberlain at GeoMarketing.com says that 37% of consumers age 50 and older say they use a voice assistant, often because simply speaking to a smart speaker or phone is easier than tapping, swiping or reducing a question to its key search terms. In other words, older users can think of their voice assistants as a helpful background entity rather than as a device.

In short, voice assistants are cutting across demographics. They’re entering more homes and workspaces. And insurance customers want to use them to secure coverage.

How P&C Insurers Are Incorporating Voice Into Their Marketing

Several insurance companies are already experimenting with voice assistant tools as part of their own marketing process, according to Danni Santana at Digital Insurance. For instance, Nationwide, Liberty Mutual (and subsidiary SafeCo) and Farmers have all launched Amazon Echo Skills.

Progressive, meanwhile, joined Google Home in March 2017, the first insurance carrier to do so, according to Rachel Brown at Mobile Marketer.

Other insurance companies have experimented with different approaches. Amica Mutual Insurance, for example, launched an Alexa skill that doesn’t connect users to their individual accounts. Rather, it offers information in more than a dozen categories to help users better understand billing, discounts, storm preparation and more.

With the development of Alexa skills and similar tools, brands are thinking about how a voice assistant’s sound affects their brand development, says Jennifer Harvey, VP of branding and communications at Bynder. The choice of voice tone, pitch and speed can all send a powerful message about an insurer’s brand and culture, whether it’s reassuring, serious, cheerful or anything in between.

One of the big opportunities for insurance companies and voice assistants is access. Currently, voice assistants can take on many simple tasks but can’t always handle a transaction as complex as ensuring a customer receives the right home or auto coverage for their needs. Yet developments in AI and voice recognition indicate this may change. “Alexa is already capable of placing a complicated pizza order,” says Inbal Lavi, CEO of Webpals Group, “underscoring that voice assistants will act as more than middlemen.”

For now, however, even the digital middleman approach can benefit potential and current P&C insurance customers and the companies that serve them. “We want to enable easy access for our customers,” says Alexander Bernert, head of brand management at Zurich Insurance. “Consumers do not necessarily think of taking out disability insurance between 9 am and 5 pm, but maybe even shortly before midnight.”

It can be tough to reach an insurance agent shortly before midnight. But a voice assistant can find one, provide information and even schedule an appointment — making it easier for potential customers to turn into actual purchasers.

In a world where insurance customers already do research and contact insurers via multiple channels, voice assistants are a natural frontier for insurance marketing.

Chatbots and the Future of Interaction

When it comes to the list of disruptive technologies, are we giving chatbots enough credit?

Chatbots are only beginning to show their potential, garnering initial headlines primarily due to Lemonade and its chatbot called Maya. That is interesting, considering that chatbots and AI will likely have a greater overall impact than many of the up-and-coming technologies we have grown to accept, such as autonomous vehicles. How is it possible that chatbots are silently sitting on the sidelines?

It’s simple. They aren’t sitting silently. Chatbot development and use is in full swing. The headlines are picking up. Research organizations are putting forward more predictions about chatbots than ever. Chatbots are easier to implement than many technologies and, operationally, they will provide real value. Text-based or voice-carried artificial intelligence and service-focused functions can readily swap with current human-based adviser/service functions. As complex as they are on the back end, chatbots don’t require major hardware investment, such as sensors, and they don’t require an inordinate amount of coding. So, for all of their disruptive potential to the way we do business, they may be far less disruptive to operations and IT, though operations and IT (and customers) stand to benefit from chatbots.

See also: Chatbots and Agents: The Dynamic Duo  

In an era where impatience is growing and speed is rewarded, chatbots can dramatically improve service levels and meet or exceed expectations. They can also make the economics work for providing service and executing transactions for the growing ranks of high-volume, on-demand, low-premium risk products coming to the market. They are the future of nearly all personal business transactions. For insurers, chatbots can be their own distinct channel as well as augmenting existing channels, supporting a multi-channel world.

Chatbots are growing in use and importance

In Majesco’s Future Trends 2017 Report, we discussed the impact and potential of chatbot growth. Chatbots aren’t growing merely because they have service potential — they are growing because automated non-human service is gaining acceptance among the Gen X, Millennial (Gen Y) and Gen Z cohorts.

Chatbots’ appeal and growth will likely make them one of the technologies to break out of age-based stereotypes. WeChat, China’s most popular chat app, is a great example. With nearly 1 billion users (889 million people), its impact is felt across generations and is even spurring older generations to adopt mobile technology. WeChat is popular — its users interact for an average of 90 minutes per day. Because it uses voice commands, it is also learning from conversations, illustrating the potential of chatbots to gain something from each interaction.

Business Insider said that 80% of businesses will be using chatbots by 2020, with 42% believing that chatbots will improve the customer experience. In addition, 29% of customer service positions in the U.S. could be automated with chatbots or other technology.

Chatbots offer immense potential for customers to interact with an insurer, through direct interactions within messaging or other social media apps.

Other technologies and their impact on chatbots

The “automated home” race between Amazon’s Alexa, Google’s Home, Apple’s HomePod/Siri and many other technology providers will enhance chatbot adoption and use. The more people become comfortable with interactions that are non-human, the easier it will be for people to feel comfortable in a chatbot purchase and service environment. Insurance is already adopting chatbot use and ramping up chatbot availability.

In the past year, for example, insurtech saw a rapid rise in the use of chatbots within startups ranging from Elafris, which enables customers to download auto ID cards and pay bills, to Denim, which markets to consumers and links them with insurers or agents for renter or homeowners insurance.

Robo-advisers represent a chatbot with real AI integration and rules management that can go beyond outside customer service and well into day-to-day executive assistance.

In July 2015, Zurich shared how it was using robo-advisers in two ways: First to accelerate and improve policy processing and issuance that improved quality and accuracy for international casualty programs. Second, Zurich used them in the U.K. to conduct routine diary reviews for open claims that traditionally required attention by human operators.

In the quest for improved customer service, quality, accuracy, speed and efficiencies, robots and robotics have significant opportunity for insurers. From automating processes to interacting with customers, the potential seems limitless, as well as creating a starting point for cognitive applications.

A natural link: AI and Chatbots

Cognitive systems help visualize, use and operationalize structured and unstructured data, pose hypotheses based on data patterns and probability and understand, reason, learn and interact with humans naturally. As a result, the systems help organizations create knowledge from data to expand nearly everyone’s expertise, providing continuous learning and adapting to the environment to out-think the competition and the market.

AI and cognitive computing technologies like IBM’s Watson have been touted as the link between data and human-like analysis. Because insurance requires so much human interaction and analysis regarding everything from underwriting through claims, cognitive computing may be insurance’s next solution to better analyze and price risks using new data sources, while adding an engaging and personalized advisory interface to their services.

A savvy insurance technologist can easily begin to draw the lines between that kind of intelligence management and its potential when linked to chatbot advisory and directive services. Just as many of today’s advisors and agents have experience in underwriting, tomorrow’s chatbot may carry with it the ability to market, gather data, quote, underwrite, issue policies and settle claims without human intervention. Putting one face on an insurance company probably couldn’t get more complete than that.

See also: Hate Buying? Chatbots Can Help  

For now, we can see the seeds of this complete chatbot value chain in its beginnings. At the recent SVIA InsurTech Bootcamp in August that we were involved in, we saw and discussed the array of opportunities to leverage chatbots, AI and cognitive … highlighting the opportunities unfolding.

In June of this year, PolicyPal, a Singaporean startup, announced the launch of its AI-enabled mobile app, which includes a chatbot supported by IBM Watson Conversation technology. The app not only helps prospects through the insurance selection process, it explains complex insurance concepts to consumers to enhance their overall insurance knowledge. The AI, having educated itself, is in effect giving back through chatbot interactions. That is the future of insurance interaction, a market where both parties have something to learn and gain from the insurance relationship.

When Gartner asserts that, “Chatbots will power 85% of all customer service interactions by the year 2020,” that may be enough to drive some business leaders to look into all that chatbots have to offer.

Auto Claims: Future May Belong to Bots

Despite a decade of prominence, the Age of the App may be over. The future of auto claims could belong to the chatbots.

Equipped with AI and machine learning capabilities, these computer software programs can conduct natural language-like conversations with customers in real time. Already, Amazon’s Alexa and Apple’s Siri are working as personal assistants and shoppers, while others serve as bankers, officer managers, HR administrators, concierges and more.

And it won’t be long before chatbots quickly expand throughout the insurance sector. They are already starting.

Compared With Chatbots, Apps Are a Nuisance

Because the insurance industry is traditionally slow to adopt new technology, apps are still considered “cutting-edge” by many insurance carriers. Compared with chatbots, though, mobile self-service apps may shortly be seen as the customer-service equivalent of a horse and buggy. According to Gartner, 20% of all brands will abandon their mobile apps by 2019. By contrast, Gartner forecasts that, by 2020, AI bots will power 85% of all customer service interactions.

What’s behind this warp-speed transition from apps to bots?

Speed, convenience and user-friendliness.

See also: Much Higher Bar for Customer Service  

While mobile self-service apps do represent a great leap forward for some policyholders, even those who love them were never thrilled about the time and patience required to download and install them and learn to use them. And many people have grown weary of their cell phone real estate being occupied by one-time apps. For every 10 apps downloaded by consumers, seven are uninstalled after just two weeks without ever being used.

Interacting with a chatbot involves no user’s manual. Customers can message (24/7) to converse with an intelligent chatbot that, for all practical purposes, behaves like a human – one fully equipped to handle all their auto insurance concerns.

In fact, chatbot-powered customer service could be even better than the “traditional” variety for mundane questions. For example, customers will no longer have to endure a menu of phone prompts before they’re connected with the appropriate person. Instead, the bot will be able to answer most questions or guide them through the steps needed to achieve the desired outcome in the format we’ve become accustomed to, text messaging.

Improving the Customer Experience

Imagine a self-service claim in which the vehicle owner interacts with a chatbot. The customer starts by verifying his identity and is then orally or text-guided through a series of steps to complete the entire process.

The chatbot asks questions. The customer answers. The customer submits photos or videos of the damaged vehicle, and the chatbot either responds with additional questions or walks the policyholder through the next steps. Once the process is finished, the bot transmits the details of the transaction to the carrier, which determines the right outcome for the claim – e.g., whether an estimate needs to be written by a human, through an AI photo estimating solution or through having the owner bring the car to a repair facility.

At some point, policyholders will even receive auto claim payments through the chatbot, further streamlining the claims process. This is already happening in some areas of insurance.

And because chatbots can learn and acquire more knowledge with every transaction, they will make the customer experience better as they continually collect and process vast amounts of data.

For customers, dealing with a chatbot for assessing vehicle damage will be like having an appraisal assistant standing right next to them. Of course, many people will realize that they are not, in fact, talking with another person, but communications will be so seamless and natural that they may eventually forget this.

For insurers, chatbots will lower costs by allowing companies to replace many customer service personnel. For example, customers have a tendency to call their insurers multiple times to inquire about their claims and ask basic questions. Such interactions could be easily automated using a chatbot.

See also: Hate Buying? Chatbots Can Help  

Incorporating Chatbots into the Claims Department

While chatbots have many applications, by no means is technology the right solution in every customer service interaction. There are many times when the human factor is far superior. Chatbots are one more tool in the toolbox. Here are two smart uses for them in a claims department:

1. Guiding customers, step-by-step, through the claims process using structured questions and answers. For example, if you want a vehicle owner to complete a mobile self-service claim, you could employ a chatbot to guide them through the verification process, as well as the submission of photos/videos and other documentation of the damage. Once this is done, the bot might transmit the claim to your company and an auto repair facility. An added benefit is that you will be collecting lots of data to help process not just this one claim but to enhance the customer service experience on all future claims.

2. Answering an array of FAQs submitted by policyholders – FAQs for which carriers currently deploy vast CS resources. Creating a human-like experience for managing thousands of customer inquiries could dramatically lower your customer service costs.

Ironically, the biggest benefit of chatbots is enhancing the customer experience by providing services that are faster and more personalized – a machine-made level of personalization.

So while apps still have a place in the insurance industry – for now – it’s likely that some of them will be out of a job, thanks to the rise of the chatbot.

The Big Lesson From Amazon-Whole Foods

I doubt that Google and Microsoft ever worried about the prospect that a book retailer, Amazon, would come to lead one of their highest-growth markets: cloud services. And I doubt that Apple ever feared that Amazon’s Alexa would eat Apple’s Siri for lunch.

For that matter, the taxi industry couldn’t have imagined that a Silicon Valley startup would be its greatest threat, and AT&T and Verizon surely didn’t imagine that a social media company, Facebook, could become a dominant player in mobile telecommunications.

But this is the new nature of disruption: Disruptive competition comes out of nowhere. The incumbents aren’t ready for this and, as a result, the vast majority of today’s leading companies will likely become what toast—in a decade or less.

Note the march of Amazon. First it was bookstores, publishing and distribution, then cleaning supplies, electronics and assorted home goods. Now, Amazon is set to dominate all forms of retail as well as cloud services, electronic gadgetry and small-business lending. And the proposed acquisition of Whole Foods sees Amazon literally breaking the barriers between the digital and physical realms.

See also: Huge Opportunity in Today’s Uncertainty  

This is the type of disruption we will see in almost every industry over the next decade, as technologies advance and converge and turn the incumbents into toast. We have experienced the advances in our computing devices, with smartphones having greater computing power than yesterday’s supercomputers. Now, every technology with a computing base is advancing on an exponential curve—including sensors, artificial intelligence, robotics, synthetic biology and 3-D printing. And when technologies converge, they allow industries to encroach on one another.

Uber became a threat to the transportation industry by taking advantage of the advances in smartphones, GPS sensors and networks. Airbnb did the same to hotels by using these advancing technologies to connect people with lodging. Netflix’s ability to use internet connections put Blockbuster out of business. Facebook’s  WhatsApp and Microsoft’s Skype helped decimate the costs of texting and roaming, causing an estimated $386 billion loss to telecommunications companies from 2012 to 2018.

Similarly, having proven the viability of electric vehicles, Tesla is building batteries and solar technologies that could shake up the global energy industry.

Now, tech companies are building sensor devices that monitor health. With artificial intelligence, these will be able to provide better analysis of medical data than doctors can. Apple’s ResearchKit is gathering so much clinical-trial data that it could eventually upend the pharmaceutical industry by correlating the effectiveness and side effects of the medications we take.

As well, Google, Facebook, SpaceX and Oneweb are in a race to provide Wi-Fi internet access everywhere through drones, microsatellites and balloons. At first, they will use the telecom companies to provide their services; then they will turn the telecom companies into toast. The motivation of the technology industry is, after all, to have everyone online all the time. The industry’s business models are to monetize data rather than to charge cell, data or access fees. They will also end up disrupting electronic entertainment—and every other industry that deals with information.

The disruptions don’t happen within an industry, as business executives have been taught by gurus such as Clayton Christensen, author of management bible “The Innovator’s Dilemma”; rather, the disruptions come from where you would least expect them to. Christensen postulated that companies tend to ignore the markets most susceptible to disruptive innovations because these markets usually have very tight profit margins or are too small, leading competitors to start by providing lower-end products and then scale them up, or to go for niches in a market that the incumbent is ignoring. But the competition no longer comes from the lower end of a market; it comes from other, completely different industries.

The problem for incumbents, the market leaders, is that they aren’t ready for this disruption and are often in denial.

Because they have succeeded in the past, companies believe that they can succeed in the future, that old business models can support new products. Large companies are usually organized into divisions and functional silos, each with its own product development, sales, marketing, customer support and finance functions. Each division acts from self-interest and focuses on its own success; within a fortress that protects its ideas, it has its own leadership and culture. And employees focus on the problems of their own divisions or departments—not on those of the company. Too often, the divisions of a company consider their competitors to be the company’s other divisions; they can’t envisage new industries or see the threat from other industries.

This is why the majority of today’s leading companies are likely to go the way of Blockbuster, Motorola, Sears and Kodak, which were at the top of their game until their markets were disrupted, sending them toward oblivion.

See also: How to Respond to Industry Disruption  

Companies now have to be on a war footing. They need to learn about technology advances and see themselves as a technology startup in Silicon Valley would: as a juicy target for disruption. They have to realize that the threat may arise in any industry, with any new technology. Companies need all hands on board — with all divisions working together employing bold new thinking to find ways to reinvent themselves and defend themselves from the onslaught of new competition.

The choice that leaders face is to disrupt themselves—or to be disrupted.