Blog: Why Is The Insurance Industry Betting Big On Artificial Intelligence?
The appeal of artificial intelligence across many industries is impossible to deny. But it may come as a surprise to hear that the insurance industry — typically perceived by outsiders to be one of the more decidedly unsexy industries today — outspends 12 other major industries when it comes to investing in AI.
According to the Global Trends Study 2017, insurance invests an average of $124 million per company in this alluring technology. That’s $54 million more than the average across all industries surveyed.
And a good example of artificial intelligence in the insurance industry are called chatbots. Chatbots play a vital role in that effort to scale for customers’ needs. Here are some of them:
Chatbots can reduce customer confusion
According to a survey in 2017, 72 percent of consumers agree that insurance companies use confusing jargon. Trying to navigate the nuanced differences between term-life versus whole-life insurance, for example, can be overwhelming if you’re unfamiliar with the field. A chatbot can help reduce potential confusion — or even eliminate it, if we’re feeling ambitious — by putting complex terms into more straightforward language and walking new customers through simple steps.
Chatbots are available 24/7
Unfortunately, no one can control when something happens that will require an insurance claim. Car accidents, home damage, and life-threatening events can and do occur at all hours of the day and night, and customers often find themselves constrained to calling within business hours if they need assistance filing a claim. But a chatbot can be available at any time. Plus, it remains unaffected by high call volume, so customers don’t have to sit on hold for an hour or longer.
Chatbots streamline tedious processes
A chatbot has the capability to cut down on redundant paperwork and unnecessary steps in an insurance claims process that many customers currently dread. Although some disgruntled insurance customers might claim that such a future is too much to hope for, chatbots are already making this dream a reality. There may be some instances that not every insurance chatbot will settle every claim that quickly, but undoubtedly insurance wait times and overall process duration will be significantly reduced through the use of AI.
Although chatbots (and AI in general) offer tantalizing opportunities for the insurance field to progress, machine learning technology still faces an uphill climb before companies can fully unleash it. Skeptics rightly argue that chatbots lack human empathy, or that they can be too easily exploited. Developers will have to overcome these problems before anyone goes all-in on AI.
Yet in an industry like insurance that already faces so many challenges in appealing to its customers, chatbots already solve at least some of their bigger problems.