Chatbots improve customer experience for the insurance industry

Technology has long played an important role in providing exceptional customer experience for many brands, including the insurance industry.

In fact, superior customer experience allows companies to remain competitive and differentiate their brands by focusing on ways to benefit consumers and satisfy their demands. Therefore, it is no surprise the insurance industry is increasingly investing in chatbot technology to personalise their services, minimise human error, rectify issues in a timely manner, provide 24-hour service and more, thus improving the customer's experience with the brand.

Chatbots, sometimes referred to as Intelligent Virtual Assistants (IVA's), have been a popular point of discussion for many brands and companies in recent times, with many organisations implementing the feature to advance and modernise their digital marketing and advertising services. In fact, according to Ernst and Young, 89% of companies already use or are planning to use chatbots by 2020 due to various business opportunities it provides, including customer experience. As a result, it is believed that by the new decade, customer experience will be the most fundamental competitive differentiator for brands, surpassing price and product differences.

Despite being around for years, chatbots have only recently been widely adopted by businesses and accepted by users. In fact, the world's first chatbot named Eliza was a computer program written in 1966. While more complex nowadays, chatbots have been designed to simulate human conversations through text or speech and uses artificial intelligence and complex algorithms to do so. Advancements in the technology have allowed chatbots to collect or access data to accurately handle enquiries and requests in an automated approach, providing efficiency and potentially minimising costs for businesses. 

The technology behind intelligent virtual assistants and chatbots have exceptional benefits for the insurance industry in maximising the customer experience for the new consumers and exisiting clients. In fact, a recent survey by Ernst and Young identified that the consumer themselves believe chatbots satisfy their demands for speed and convenience when dealing with insurance providers and their online services. Furthermore, the study also acknowledged that consumers regarded chatbots and online chat services one of the most beneficial communication tools to interact with insurance brands, with face-to-face being the most preferred, while telephone was the least. 

Chatbots allow consumers to access a virtual representative from insurance firms 24 hours a day, providing them with the ability to get quick answers and rectify complaints or concerns as they happen. Ultimately this lead to an improved brand experience, as consumers who have complaints may only have their frustrations accelerated if they have to endure excessive wait times on the phone, representatives are not available at the time of the call or even fail to get past the all annoying telephone prompts.

The ability to access an on-demand service that understand your enquiries, can solve them instantly or even pass you on to a human when necessary in fast speeds limits such frustrations and enables problems to be quickly resolved, thus an improved experience over its telephone counterpart. Not to mention, the adoption of chatbot use via consumers will free up the time human representatives would be spending on the phone dealing with every individual's request, creating more efficiency and allowing them to be available for the more complex situations when customers do need them. 

Furthermore, a chatbot's artificial intelligence capabilities provides new methods for acquiring additional customers as well as identifying timely opportunities to upsell to exisiting consumers. By gathering relevant data sources about an individual such as data collected from online marketing and advertising efforts, sales records and personal data they provide, just to name a few, insurance brands can identify opportunities that are highly relevant and personalised towards that individual. This intelligent method results in more proactive and relevant targeting, increasing the selling potential and ensuring a consumer remains engaged with the products you offer. 

For example, a consumer who is consistently inundated with marketing messages about products that are not relevant to their needs and circumstances may eventually disregard all marketing messages and potentially miss an opportunity when it is relevant. However, through the use of data and artificial intelligence, a chatbot can easily and efficiently identify additional opportunities that are relevant to the consumer such as the change of residential address potentially signifying a new home purchase, and therefore the potential to buy or update their home insurance policy.

The implementation of chatbots is also creating an even more competitive environment for the insurance sector, which in turn forces brands to look for ways to improve the brand experience. While traditional insurance companies are integrating the technology to improve their current operations and provide the customer service consumers are demanding, start-up businesses that solely rely on such technology are continuously popping up to compete with the big leagues by completely satisfying today's digitally savvy consumer. Therefore, it is essential to consider the benefits of chatbots in order to remain competitive and relevant for the consumer.

In fact, according to the Insurance Council of Australia, statistics published in 2017 by the Australian Prudential Regulation Authority shows that the private sector insurance industry generates a gross written premium of $44.9 billion per annum. Meanwhile, The Economist states that globally, the industry is worth $4.6 trillion in premium income. Undoubtedly, the profitability of the sector, along with advancements in technology and consumer demand has sparked an entrepreneurial spirit amongst many individuals who are finding lucrative opportunities within the industry that they can exploit. 

This was the case for two individuals in the United States, who created the InsurTech start-up Lemonade, which managed to sell 2,000 new policies in 100 days and even holds the world record for processing and paying a claim, which happened in 3 seconds. So how did Lemonade achieve such a feat? You guessed it! The company utilises chatbots and artificial intelligence properties in order to sell policies and manage claims in a simplistic, personalised and time friendly manner. While the company recognises the great convenience this service provides to customers, they understand that the chatbots are still learning and pass on the more complex claims to humans in order to maximise the customer experience for the individual. 

Undoubtedly, chatbots are having an impact on many businesses and their various operations. The insurance sector, in particular, can see great benefit from implanting chatbots into their mobile applications and websites and can be a great digital marketing and online advertising tool. Chatbots are increasingly used as a virtual customer service representatives by meeting a consumer's demand for convenience, speed and relevance in a more effective and efficient way.

RGC Advertising is a full-service, award winning digital media ad agency based in Sydney, that is committed to innovation and is at the forefront of the digital trends relevant to your industry. To find out more about chatbots in the insurance industry, please contact Richard on (02) 8883 2988 or email This email address is being protected from spambots. You need JavaScript enabled to view it.