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Developing the right mindset for insurance AI

Imagine you’re an insurance customer and you recently got into a traffic accident, causing your vehicle $3,000 worth of repairs. If you want to check the status of your vehicle claim with your insurer, you usually have two choices: Go to the insurer’s website or app, and do it yourself, with the hope you smoothly navigate through the prompts, or call the insurer, wait for an agent, and have a 15-30 minute call where you hopefully get the needed answers.

But there’s a third choice available: You call, but don’t wait at all because someone at the insurer can anticipate and predict why you’re calling, and then instantaneously show you all the choices on your smartphone in a very visual manner, guiding you to the answer. That someone at the insurer is a personalized concierge for every single customer. And it’s possible now, through artificial intelligence.

With AI, the customer can get a higher-level of contextual information, support and personalization. This interactive and more seamless experience trumps a static experience on their insurers’ website.

And it’s in line with what customers want from their insurer. Our recent 2019 Global Financial Services Consumer Study, which surveyed 47,000 consumers, revealed that insurance customers desire omni-channel experiences that are quick, easy, and seamless. Sixty-six percent don’t mind which channel they use to communicate with their insurer; their main concern is that they can get what they need quickly and easily.

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So why aren’t insurers developing these AI solutions to transform the customer experience? The answer is that they are, but they may be applying a “technology mindset,” which is an ineffective approach.

The reality is that insurers are essentially trying to create a human being – powered by AI – to serve customers, and this entails more than just the technology. They can’t be functionally siloed and instead need to reimagine the entire customer experience. Doing so requires creating a living feedback system for customers so that insurers can know where they are meeting expectations and where the experience needs fine-tuning. This almost-real-time approach runs counter to the traditional technology approach, where new technology is deployed and then evaluated infrequently for feedback on its performance.

Ultimately, customer service can be transformed from a cost center to a driver of growth and retention. Companies in other industries, including telecommunications, retail and aviation, are embracing this new AI approach to customer service. It’s time insurers follow suit and apply the same principles.

But as they embrace new, digital approaches and deploy them at scale, insurers must be cognizant to leverage AI responsibly and transparently. There have been concerns related to loss of privacy, potential biases in decision-making and lack of control over automated systems. Ethical, transparent and accountable use of AI technologies is possible, though, with proper planning, oversight and governance.

It’s also critical for insurers to remember that adopting these customer-facing activities requires enabling and automating core capabilities at the back-end. There’s a clear benefit to insurers’ operating costs, as AI-powered conversations that enable personalized digital-interaction resolutions can reduce operating expenses by up to 30 percent.

Plus, these AI-powered conversations allow customer service agents to focus on more challenging customer issues. As our global consumer survey showed, most insurance customers still prefer face-to-face or live telephone channels for more complex activities.

Overall, our 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 $10.4 billion and $20.8 billion. The possibilities are endless for insurers if they apply the right mindset.

(This post originally appeared on Digital Insurance, which can be viewed here).

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