Chatbots in Insurance Industry

Can chatbots replace agents in insurance?

June 21, 2018

Artificial Intelligence has walked into every industry. And, insurance sector is no exception. It dramatically transformed the mundane processes of insurance by unlocking new opportunities.

The advent of chatbots allowed customers to contact the insurer anytime from anywhere. The chatbot is an application programmed with Natural Language Processing and Machine Learning to communicate with humans. These technologies allow the bot to interact (text) with humans like humans and conduct a meaningful conversation.

Back in the day, insurance agents were always on their feet, to serve their customer with exceptional solutions. However, limited themselves to working hours and with the knowledge they acquired to through strenuous learning and grasping from continuous sessions.

The insurance agents were not mere agents or counsellors rather guided the customers with the right solutions at the right time. In such a context, can a chatbot really replace these human insurance agents can throw insurance agents, organizations, customers and even policy claimers into hesitation?

Let’s see what an insurance chatbot can do.

It is primary, as mentioned earlier, that the chatbots can perform natural human-like two-way communications. A customer can type and ask a query or ask for a recommendation, and the chatbot responds in real-time with no human-assistance involved.


They are fast. Quick!. They do not have to think like humans. They have all the data in the storage. The response time is often less than a second. It carefully reads through what a customer states and responds with the most relevant answer with machine learning and data mining techniques. Based on the context, it picks out the best answer learning from the earlier texts. As the chatbots are available 24/7, the customer need not wait for hours, just to speak to an insurance agent.

Personalized actions

A human cannot remember every single customer, but a chatbot can. The chatbot comprehends customers’ earlier actions and derives actions based on the customer preferences. They have the ability to dig into voluminous data (data mining) and derive patterns of every customer. And, customers love personalized conversations (who doesn’t!). Insurance chatbots give answers just apt for the time and the customer. They are accurate at the same time void of human errs.

Selecting the Right Coverage

While humans have decreased verbal communication with written communication, chatbots are at just the right time. As picking the right coverage in insurance is a task in itself, the chatbot becomes an automated insurance agent and sells products to the customers based on their specific needs.

The bot learns the best practices involved in choosing insurance packages and implements them while communicating with the customers. This data is the broad knowledge base for the chatbot to suggest coverages from the available options of an insurer.

Below is an example of how a chatbot helps a customer to select his right travelling coverage-image.

Risk Analysis

The chatbot has the ability to process in order to identify and evaluate potential issues involved in a customer’s insurance coverage. It recognizes negatively impacting features of the coverages and puts forward issues in series. It anticipates and balances by providing a solution to turn the situation into a beneficial one. This meets the requirements of the customer just like a human insurance agent. Like, the agent mitigates the risks and helps the customers, the chatbot takes the step a bit further by giving comprehensive solutions.

Increase Customer Engagement

The chatbot can engage the customer more (than the insurance agent) with dynamic conversation as it is much more informative than a human. It is highly personalized and interactive making it easy for the customer to feel comfortable to text a bot. It is capable to understand exactly what the customer says. In case, if the chatbot does not understand the situation, it simply says, “I didn’t get you, x. Can make it clear?” Hence, making interaction simple, easy and quick. It would be no wonder if the customers can more accurate information from chatbots than agents.

It is certain that the chatbots are the future of customer experience. But, will it replace human insurance agents becomes a tactical concern. Ultimately, it leads to questioning, is Artificial Intelligence mature enough to replace its own creators. They are many exceptional cases, that the chatbots are not capable to deal with.

As data is the key to chatbots, when the data is corrupted or lost or not imbibe, the chatbots are no more the tool. The answer is simple, the co-existence of chatbots and insurance advisors collaboratively, monitoring regularly can bring a revolution in the insurance sector.