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Chatbot is the Future of Automated Insurance

Technology is everywhere and chatbot is an elegant way to make it accessible to everyone. The technology is rapidly catching the insurance industry. It’s just that some in the insurance industry don’t yet realize it. Whereas the focus of banking-oriented Fintech was all about “disruption”, the digital innovation focus of InsurTech is about “rapid evolution”. A great example of this is the chatbot, which in insurance market terms is basically an automated insurance agent

What is a Chatbot?

A chatbot is a type of software  that is able to communicate with humans using artificial intelligence, which in its strange way could mean a return to basic human interaction. You can talk to a chatbot as you would to a friend on Facebook Messenger, Skype or WhatsApp. It makes a company’s service more personal than ever (at least in theory).
The concept has already been proven to work in places like China. WeChat for instance is a messaging service where any organisation or company can make an account and 600m users in China are already using it every month to handle their online banking, to hail a taxi or even book a doctor’s appointment.

The technology has actually been widely used in the insurance industry for over a decade and a good reference site is Chatbots.org. Interestingly, most of the chatbots are given names to make them more human-like. Some examples:

Magda is the Chatbot for Link4, Poland’s first motor insurance product sold online.

Allie is Allianz’s online assistant available 24/7.

Mia answers customer’s insurance queries for Co-op Banking Group.

Arbie “works” for RBC Insurance in Canada.

Nienke is in the Dutch market talking to NN’s customers about insurance.

Marc represents Credit Agricole’s health insurance offering in France.

Hanna has been around since 2003 for the Swedish Social Insurance Agency.

Why does Chatbot matter NOW?

First, people already text a lot. There are billions of messages sent every hour. Humans have substituted verbal communication (human to human) with written communication (human to machine to human). Humans are already chatting with computers and chatbots make it possible for the machine to chat back.

Another reason is we are in App overload. Think about your own smart phone. Research shows that we only use about about 5 regularly, and half of these are social media apps. Most of us are at our limit for apps and dont need another one. Chatbots don’t need an app to engage with customers.

We already use them. The original Instant Messaging platforms used very basic chatbots to respond to text. So the chances are that we’ve all used them sometime along our digital journey and just don'tknow about it.

Finally, evidence suggests email has run its course. It’s great for sharing information but horrid at conveying understanding. People are more engaged with a digital chat experience than they are with an analogue email exchange.

So where does a chatbot live?

Some time ago, at Facebook’s F8 conference, one of the major announcements was that they are opening up the Messenger platform to chatbots. Opening up its Messenger platform for anyone to develop and deploy chatbots also opens the door for the automated insurance agent.

It allows insurance firms to deploy distribution, claims and customer service straight into a platform that has 900 million regular users each month and supports 60 billion messages every day!


Photo: techradar.com

Today we simply use these apps to communicate with friends or work colleagues. However imagine if instead of just being able to contact your human friends you could talk with a chatbot that could quickly answer questions in a conversational way. Perhaps even participating in the conversations with your human friends.

At its most basic the chatbot will directly answer generic questions. However, very quickly we see the lowly chatbot being able to access data specific to you and thus gaining what some like to call a memory or what I like to refer to as personalized contextual intelligence. Bottom line the more a system whether it be a chatbot or another kind of system knows about you the more useful it becomes. A perfect example of this would be the classic question: "will it rain?". Well if the chatbot has access to your location information then it can answer a lot more intelligently than if it did not have access to your location.

Bottom line is a lot of folks now believe that given how quickly messenger products are replacing legacy communications methods like email and text then very soon chatbots embedded in these messenger apps will replace dedicated apps for search and customer service. This is exactly why Facebook and Google are so interested in chatbots. Given the massive revenue that comes from traditional technologies like search, the idea that something embedded inside a messenger app could replace all of that is a huge threat and justifies massive investment.

It is not a leap to imagine a world where chatbots with data hooks into our customer history and access via API connections to external data sources will soon be the first line of defense when consumers have a question. Because of the conversational nature of the interface chatbots align very well with the way that humans like to interact. Also the fact that these chatbots live inside the very interfaces where many consumers are now spending more and more time make the transition from traditional human agent to intelligent chatbot powered customer service even more inevitable.

How chatbots are impacting the insurance industry?

The vast majority of inbound calls whether they are related to personal lines or commercial lines of a smaller scale are to either make very basic changes to a policy or to ask a question which for the most part would be easy to answer so long as the agent or system has access to contextual data surrounding the caller. Examples of this would be policy endorsements like adding or removing a vehicle, requesting a basic certificate of insurance or asking a question related to current coverage. Questions like these could very quickly be answered by appropriately empowered chatbots that live right inside a messenger client such as the one powered by Facebook.

This is important not only because it is a fundamental change to how insurance companies and brokers can interact with their customers and prospects but it is also a significant shift away from where the interaction takes place. Today we see a lot of discussion in the industry around the need for customer portals associated with broker and carrier websites. Prediction is that these portals will become barren wastelands. Why? Because the way we interact with consumers is about to change in such a fundamental way that these static portals will act as an obstacle rather than a facilitator of interaction. As usual, consumers are proving, they will choose how and where they want to interact. With the advent of social media consumers have demonstrated that they have a voice and are willing to use it. Businesses have learnt that trying to silence customers only results in catastrophic blowback.

SPIXII is a personal assistant for insurance

SPIXII is an automated insurance agent dedicated to making insurance quicker, easier and more personal than ever before.

Even a whiff of insurance is enough to send most people running: memories of filling out long, tedious forms or being up-sold by smarmy salespeople because you ‘definitely’ need a policy to cover you against killer bees or surprise volcanos.

Indeed SPIXII has almost entirely done away with the human component of selling insurance. Its app creates a WhatsApp-like chat on your smartphone where a robot will ask simple questions and figure out what you need.


Photo: spixii.com

So far SPIXII is still in early testing, selling travel, motor and life insurance while speaking to beta testers in five different languages.

The people at SPIXII say: “To gain trust, SPIXII will start by selling simple insurance products that people are already used to buy online. Once people become accustomed to it, we will expand to more complex products.

SPIXII is smart too. If you’re travelling abroad and the app detects you might be doing an activity not covered by your current insurance policy, like jet skiing or scuba diving, the app will give you a nudge to remind you."


"Chatbot & The Rise of the Automated Insurance Agent" by Rick Huckstep

"Chatbots, insurance and the death of the customer portal"

This chatbot speaks 5 languages & wants to make insurance more human


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