Leading insurance organizations are tapping into the revolutionary capabilities of AI-driven chatbots to take the customer experience and business efficiency to new levels.
Today’s powerful AI chatbots act as virtual assistants – streamlining and accelerating operations by instantly providing precise policy coverage and billing details, claims-processing information, responses to routine inquiries such as quote and pricing requests, and much more. Smart chatbots simulate human conversation and enable businesses to communicate around the clock with multiple customers simultaneously – providing timely information and self-service capabilities that eliminate the need for customers to wait for live support.
Generative AI chatbots, in particular, go beyond predefined answers to deliver dynamic personalized responses that cater to specific user preferences and needs. These smart ‘bots’ converse in hundreds of languages using natural language processing (NLP) and adapt to emerging marketplace trends with evolving content, timely insights and personalized recommendations. Chatbots also excel at automating repetitive manual business tasks – improving employee workflow, productivity and operational efficiency. Simple administrative tasks, employee onboarding, data collection and more are all being handled today by AI chatbots.
While chatbots have been utilized by insurance firms for years, their capabilities have been limited – until now. AI chatbots are clearly making their voices heard globally today. The worldwide chatbot market is expected to reach US$1.25 billion by 2025, according to the Center for Insurance Policy and Research. More insurers are discovering that, among their many unique advantages, perhaps the strongest case for AI chatbot implementation is their ability to revolutionize customer service and efficiency while ultimately lowering costs in today’s hypercompetitive digital economy.
Generative AI also holds immense potential. It is projected to boost Canada’s economy by C$187 billion annually by 2030, although only 17% of Canadian financial and insurance organizations currently utilize this technology, as reported by Statistics Canada earlier this year. CGI’s 2024 Voice of Our Clients report highlights that insurers are increasingly focused on leveraging data and AI. According to the findings, 40% of insurers cite AI as their top innovation priority over the next three years. Leading property and casualty as well as life and pension organizations plan to invest in AI, machine learning, and big data analytics to enhance underwriting accuracy, improve claims processing efficiency, and elevate customer experience. These investments are crucial to staying competitive in an evolving landscape. Meanwhile, a 2023 North American survey of 220 AI decision makers by Forrester Consulting revealed that 83% of organizations are currently exploring or experimenting with solutions and applications involving generative AI.
Navigating challenges on the AI chatbot journey
Two types of chatbots exist today. Rule-based chatbots – also known as chat flows – that follow pre-defined rules to manage routine queries and requests with standardized responses for automated customer support.
Generative AI chatbots, on the other hand, are more sophisticated and can address relatively complex customer queries using AI to tap into data and natural language algorithms. These advanced systems learn from data using AI and machine learning, and use natural language processing (NLP) to provide accurate conversational responses to a broad spectrum of requests.
While more insurers are exploring or adopting the advantages of AI chatbots, challenges remain. A key challenge we are seeing in the market today is the need for businesses to prioritize innovation requirements and investment in order to keep up with competitors as the rapid pace of change accelerates. Insurers, like most businesses on the chatbot journey today, are also voicing concerns and questions regarding the need to implement chatbots in ways that ensure customer privacy, unbiased responses and regulatory compliance. In today’s hypercompetitive environment, businesses are also struggling to manage constraints related to cost management, aging legacy technology and reliance on diverse and disconnected data silos.
To effectively harness the potential of AI chatbots, insurers should consider addressing these challenges proactively. This could involve fostering a strategic approach that emphasizes ethical AI deployment, integrating legal and compliance frameworks early in the development phase, and aligning with evolving customer expectations.
AI chatbots are on the rise
Despite challenges like higher-priority revenue-generating projects and resource constraints, more businesses also recognize the substantial benefits that AI chatbots offer both to operational efficiency and to customers in terms of convenience, accessibility, personalization, self-service features and reliability of information. Key advantages observed include:
- Improved customer engagement and satisfaction
- Reduced average handling time
- Cost savings from automation
- Fewer error rates and compliance violations
- Enhanced employee productivity
- Integration with other systems and technologies
AI chatbots also enhance security and help prevent fraud schemes without compromising the customer experience. Chatbots can catalogue information, review policy details and flag suspicious activity or claims by running fraud-detection algorithms before a payout is made. They can also help remove the subjectivity that exists in a human interaction, as the process can be standardized across all interactions.
CGI’s AI specialists are helping leading insurers implement multi-language generative AI chatbots with market-leading backend tools from Microsoft Azure AI, Amazon Web Services (AWS), and Python natural language processing. This solution is flexible and highly adaptable, allowing insurance companies to tailor the chatbot’s knowledge base to their specific needs.
From policy details and FAQs to claims-processing information and more, the chatbot's knowledge base is automatically updated as new information is added and expanded to ensure timely and relevant responses to customer inquiries. And while chatbots represent a major opportunity for insurers, it’s important to note that businesses also need to maintain a ‘human touch’ that ensures access by customers and employees to live support at all times, perhaps at a cost.
As AI chatbots deliver unprecedented speed and accuracy to the execution of time-sensitive, data-rich tasks, insurers are discovering a wide range of valuable use cases, including:
- Customer feedback – Receiving timely insights and suggestions from policyholders to help insurers refine their insurance products and services.
- Policies and refunds processing – Automating management of key processes to enhance the customer experience and accelerate the service.
- Customer onboarding – Guiding new policyholders through the onboarding process, answering inquiries about coverage details, premium payments and policy documentation, as well as providing assistance as needed.
- Chatbot marketing – Providing customers and key insurance markets with personalized marketing messages, promotions and product/coverage recommendations.
- Lead generation – Enhancing insurers’ revenue generation and competitiveness by having the insurance chatbot interact with website visitors and qualify potential customers.
- Internal help desks – Assisting insurers’ employees by handling IT-related queries and internal processes, providing access to policy information, and automating routine tasks like claims processing and data entry.
In conclusion, today’s insurance businesses should be actively exploring the unique advantages of AI chatbots and how they are rapidly transforming customer service and business efficiency for a new era of competitiveness. A strategic, step-by-step approach is best. We advise businesses to run a proof of concept to identify how a chatbot can drive their business forward in significant ways. And we are seeing interest grow as the chatbot technology rapidly evolves to provide an array of unprecedented capabilities and features. Visit our AI chatbot for insurance page for detailed insights and connect with our subject matter experts to explore real-life AI chatbot use cases for inspiration.
