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2020 and beyond: why it’s vital that insurers embrace AI-driven CX

Mia Papanicolaou, COO, Striata
|Jan 17|magazine11 min read

When it comes to insurance, the use of artificial intelligence (AI) to determine premiums, assist with fraud detection, and speed up claims processing is becoming far more commonplace. Less well regarded, but equally important, is the role AI plays in customer communication. 

The communication sent to customers by insurers is often the only interaction with them beyond the policy or bill. These can be greatly enhanced using AI, which can result in far more loyal customers. 

Considering insurers are traditionally slow to adopt new technologies when it comes to the customer experience and are  increasingly susceptible to disruption by a wave of tech-savvy startups, it’s vital that they embrace AI as a customer communication tool in 2020. 

The need for AI 

One of the major failings of the insurance industry is that it simply doesn’t talk to its customers. In fact, some estimates show that more than 90% of insurers worldwide do not communicate with their customers even once a year.

That not only fosters the feeling among customers that they don’t really know their insurer, but that their insurer doesn’t know or care about them. 

Moreover, thanks to their experiences with other industries, such as banking and retail, today’s customer demands highly-personalized products and services, supported by relevant, easy to understand and contextual information - instantly on hand, via any channel they choose.

Insurers sit on mountains of data that would allow them to send out valuable, hyper-personalized communication. More than most industries, they’re in an ideal position to embrace the opportunities presented by AI. 

In the insurance space particularly, AI can help insurers go from taking a reactive approach to customer communication to being able to take a predictive approach that anticipates the wants and needs of their customers.

That encompasses everything from ensuring that customers receive personalized offers that are relevant to them, to improving service and communicating with them on their preferred channel without it having to be stated first. 

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The business imperative 

Research has found that “insurers who reinvent the customer experience and drive human-machine collaboration are achieving returns in excess of 10 times their investment and could increase industry-wide profitability by between US$10.4-billion and US$20.8-billion”. 

But, as more and more insurers embrace AI, merely adopting it will no longer be sufficient. As far back as 2017, the insurance industry was, on average, spending nearly twice as much on AI as other verticals.

Insurers that don’t have an AI communication strategy risk falling further behind and having to spend more money to catch up. Those that have, meanwhile, have to keep working to stay ahead of, or alongside, the competition. 

2020 and beyond 

But what might that look like in 2020 and beyond? 

Using AI tools in digital communication will help transform the customer relationship. For example, using predictive tools to provide content that is not only relevant to the customer but also increases their spend will become commonplace. Couple that with the extension of chatbots in emails sent, providing another service option for customers while reducing call center volumes, makes AI the tool that will move the needle on customer experience.

To varying degrees, these changes are already sweeping through the insurance industry. In 2020 and beyond, they will continue to do so and at an accelerated pace. 

Whatever new technologies emerge, however, it’s vital that the customer remains at the heart of all communication strategies and that they be implemented in as human-centered and authentic a way as possible. 

By Mia Papanicolaou, COO, Striata