AI is coming of age to become the new user interface of every digital insurer. Simple and smart interactions will deliver value at each connection with insurance customers, employees and partners.

In 2017, we’re already seeing a growing list of insurers leverage artificial intelligence (AI) to transform their customer- and distributor-facing channels, including the use of robo-advisors to support customers in their purchasing decisions. In some cases, insurers are choosing to partner with emerging players like Motif or Betterment, and in others, they are developing their own capabilities.

Consider the Allstate Business Insurance Expert (ABIe)—known as Abby. This virtual assistant with an on-screen personality helps agents quote and issue commercial insurance products. It finds answers through a combination of contextual knowledge and intelligent content. Asking ABIe is faster than phoning the call center and is the preferred way for Allstate agents to get help.

And some insurance pioneers are already taking AI to the customer frontline, using it to streamline claims, answer basic customer queries and, increasingly, to offer straightforward advice about complex products to customers in a codified and consistent manner. Whether deployed alone or to augment agents and employees, AI offers insurers the potential of significant efficiency gains and scalable ways to improve service.

For example, Fukoku Mutual Life Insurance in Japan is using the IBM Watson Explorer AI platform to classify diseases, injuries and surgical procedures as well as to calculate claims pay-outs. When policyholders call the hotline to make a claim, the system analyzes the customer’s voice and detects keywords. The company is even replacing a number of employees, believing that it will see an increase in productivity of 30 percent and a savings of 1.26 million US dollars within a year of the AI system being installed. Other Japanese insurers such as Dai-Ichi Life Insurance are also pioneering AI as the country grapples with an ageing population and a shrinking workforce.

GEICO in the United States, meanwhile, has launched a virtual assistant for its mobile app. Called Kate, it understands natural language and can answer basic questions like, “What is the current balance on my auto insurance policy?” or “When is my next payment due?” Such assistants will, in time, evolve to answer more difficult questions and support the sale of more complex insurance products.

Insurtechs such as Germany’s Snapsure and the UK’s Spixii are also looking at AI as a means of disrupting the market. The Spixii chatbot draws on user data and contextual data from multiple sources to advise a customer on which insurance to buy, speaking to him in plain language rather than financial jargon. Spixii is in early testing for both P&C and life insurance sales.

Within the next three years, insurance customers may spend as much time engaged with AI as talking to company employees or agents. Advice will remain a pillar of the client relationship for many insurers, especially for life products, but it will be offered as a combination of algorithm-based automation and person-to-person interaction.

Customers will base their opinions of and interest in a company on the company’s AI, just as they judge their experiences with human employees. Yet the benefits insurers may gain are immense. For example:

  • Instead of interacting with only one person at a time like a human representative, an AI system can interact with an infinite number of people at once, leading to tremendous efficiencies and freeing up human employees to perform more nuanced tasks.
  • AI-supported relationships can exist and grow across interfaces and communication styles: text-based chats, spoken conversations, gestures or even virtual reality.
  • AI systems can allow people to choose how much and what kind of interaction they want to have with the company at any given time.
  • AI can maintain a consistent brand experience through every interaction, use learning capabilities to tailor that experience to each individual and evolve the experience to react to any new product or strategy the enterprise wants to implement.

Many insurance customers are already prepared to buy and seek service and advice from AI based tools. Accenture research indicates that 74 percent of insurance customers are willing to receive computer-generated advice about the type of insurance coverage to purchase.

For insurers who recognize the value of AI, we recommend 100-day and 365-day plans to help you get started.

In my next post, I’ll take a closer look at complex ecosystems that are emerging in the new digital era.

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