Beyond Automation: How insurance chatbots can provide a conversational experience

Conversational and generative AI are set to change the insurance industry. Read about how using an AI chatbot can shape conversational customer experiences for insurance companies and scale their marketing, sales, and support.

Senior Content Marketing Specialist

Martina Ivanović

Senior Content Marketing Specialist

Manual processes, legacy systems, an aging population, and fraud detection. These are only some of the contributors to the current challenges insurance companies are facing.

But what can help insurance providers overcome these obstacles?

Chatbots are one of the most used technologies in modern-day CX. Some of the most renowned brands, including Nationwide, Progressive, and Allianz, use chatbots in their everyday customer communication and have seen striking returns.

As AI continues to develop, so will the insurance industry. In fact, the global artificial intelligence in insurance market size is expected to be worth nearly $80 billion by 2031. And McKinsey predicts that because of such developments, insurance will shift from its current state of “detect and repair” to “predict and prevent.”

The introduction of conversational and generative AI has enabled chatbots to create new content through text, videos, images, and audio and share it through human-like conversation. Now insurance companies can deploy virtual assistants that complete entire processes from marketing and sales to support, rather than a chatbot built only to answer common questions.

Let’s explore the many ways insurance companies can benefit from AI-powered chatbots – and maybe you’ll find the missing piece to your own communication strategy along the way.

What are insurance chatbots?

Insurance chatbots are virtual assistants that help support new and existing customers on their favorite digital channels. When powered by conversational and generative AI technology, insurance chatbots can complete entire processes such as processing claims, renewing policies, collecting payments, and more within minutes or even seconds.

Whether customers want to learn more about what you have to offer, process a claim, renew a policy, or pay an outstanding balance – an insurance chatbot provides automated, always-on service from discovery to retention.

New and longtime customers can benefit from an insurance chatbot since it can be programmed to:

  • onboard new customers
  • manage insurance requests and frequently asked questions
  • collect documents and process claims
  • book appointments
  • send claim notifications and reminders
  • send payment reminders and confirmation
  • renew policies
  • upsell or cross-sell to existing customers
  • share loyalty offers and discounts

Powering your insurance chatbot with AI technology enables you to set up a virtual assistant to market, sell, and support customers faster and more accurately. For example, if a customer wants to renew their policy, your chatbot can see their loyalty status and apply discounts they might qualify for. It can also upsell other packages, share the appropriate details, and connect the customer to an agent or add them to your sales funnel.

And if you’re worried that an automated assistant might seem cold and impersonal, think again. Built on the right platform, your insurance chatbot can tailor any interaction based on a customer’s brand loyalty, demographics, previous purchases, conversation history, and more. 

When building a chatbot, you can choose between: 

  • A rule-based chatbot that provides templated responses based on keywords used by customers to guide them through a conversation. For example, when a customer says “Hello,” your chatbot responds with a menu of options such as “Type 1 to speak to an agent or type 2 to see our brochure.” 
  • An AI-powered chatbot that is built to recognize customer intent and provide the appropriate answer according to its predefined flow. For example, if a customer uses “policy” or “package” in their message, your chatbot will know how to respond appropriately. 
  • An AI assistant powered by conversational and generative AI. In addition to keywords, they can recognize patterns in behavior and give customers human-like responses. AI assistants can guide customers through complete processes using text, images, audio, and more, covering a comprehensive range of use cases. 

AI chatbots and assistants offer more advanced capabilities regarding natural language understanding, personalization, and handling complex tasks than keyword chatbots. While keyword chatbots may be suitable for handling simple queries and providing basic information, AI chatbots deliver a more intelligent and personalized customer experience in the insurance industry. That’s because they’re powered by machine-learning technology that makes them smarter with each interaction – helping cover the wide range of services and queries your customers present. 

However, the choice between AI and keyword chatbots ultimately depends on your business needs and objectives. 

Powering up your policy: Benefits of chatbots in insurance

Regardless of which technology you choose to power your chatbot, automating any part of your journey will improve your business in the long run. But insurance companies looking to provide a conversational customer experience benefit most from AI chatbots. Here are just a few of the key advantages:

Enhanced customer experience

Chatbot automation enables you to offer 24/7 support to customers. It also reduces response times when customers ask about your policies, file a claim, report changes, or schedule appointments. All while personalizing each interaction.

AI chatbots already know details such as a customer’s name, their policy details, and previous claims, making it easy to resolve their queries quickly without having the customer repeat information. They can also communicate through images, videos, and documents. Imagine a customer sending a picture of their car damages after an accident and your chatbot giving them a quote within minutes – that is the real power of AI in insurance. 

Reduced costs and increased efficiency

Chatbots benefit more than just your customers, though. They can free your customer service agents of repetitive tasks such as answering FAQs, guiding them through online forms, and processing simple claims. This leaves agents with more time to handle complex cases. As a result, you can offload from your call center, resulting in more workforce efficiency and lower costs for your business. 


lower operational costs in insurance by 2030 due to artificial intelligence (Source: Precedence Research)

Improved customer acquisition and engagement

Another benefit of using chatbots in insurance is engaging potential customers proactively. Your chatbot can answer pre-sale questions such as explaining coverage options, providing quotes, and connecting customers with an agent best fit to assist them further. Connecting your insurance chatbot to the right platform enables it to funnel prospects into your lead pipeline once they collect enough information.

Personalized service and cross-selling

Conversational customer experience encompasses much more than providing quick answers to common questions. Customers want personalized service if they plan on being loyal to your brand.

AI chatbots are equipped with machine learning algorithms that can analyze customer data and preferences to offer personalized insurance recommendations. By understanding customers’ individual needs, chatbots can suggest the most suitable insurance products, such as life insurance for young families or promoting travel insurance to frequent flyers. Thereby increasing the chances of conversion. They can even recognize customer loyalty and apply discounts to purchases and renewals.

Streamlined claims processing

Insurance claims are one of the most tedious processes for brokers and customers. Using chatbots in insurance can streamline the claims process by guiding customers through the necessary steps and documentation. From reporting a car accident to submitting a health insurance claim or tracking the status of a claim – chatbots can provide real-time updates, reducing the need for customers to follow up with representatives manually.

Fraud detection and risk management

AI-powered chatbots can act as the forefront security for insurance companies by analyzing claims data, verifying policyholder information, and preventing fraudulent submissions.

Insurance chatbots powered by generative AI can monitor and flag suspicious activity, helping insurers mitigate risk and minimize financial losses. Since they can analyze large volumes of data faster than humans, they can detect well-hidden threats, breach risks, phishing and smishing attempts, and more.

Data-driven insights and competitive advantage

As mentioned earlier, AI chatbots learn over time. They gather valuable data from customer interactions, which can be analyzed to gain insight into customer behavior, preferences, and pain points. This data-driven approach helps insurance companies refine their products and services to meet customer needs better and stay ahead of the competition.

From theory to reality: Chatbot use cases and examples

Understanding how chatbots work and what they can do is one thing. But let’s look at some real-life examples of how chatbots have helped insurance companies across industries introduce conversational customer experiences:

Car insurance

Geico introduced its virtual assistant, Kate, to answer questions about quotes, policies, claim handling, or general insurance within its mobile app. It’s also programmed to direct customers to parts of its website or mobile app pages, help them find their ID card, or answer billing questions when they log in. With multi-platform access, Geico’s chatbot makes it easy for customers to get the information they need without speaking to a live agent.

Another example is LAQO, a fully digital insurance company that implemented an AI-powered chatbot, Pavle, on WhatsApp to improve customer service. Now, 30% of queries are handled by the chatbot, of which 90% are resolved within 3 to 5 messages.

We are developing new, rich functions to improve the interaction between LAQO customers and the brand. Pavle will now be able to share images and videos connected with the questions, making the whole interaction more engaging. We are also working on the multi-personality feature.

Martina Ćurić

Staff AI Engineer at Infobip

Health insurance

Aetna’s chatbot, Ann, lives on its website and offers 24-hour support for new members and existing customers trying to log in. Powered by natural language processing, Ann mimics the look and voice of a human to give customers a friendly response. As a result, Aetna’s website experience has improved, and phone calls to its call center have declined by 29%.

Renter insurance

Lemonade, a disruptor in the insurance industry with a digital-first approach, introduced several chatbots as a part of its business model: 

  • Maya, the customer experience bot that walks renters, homeowners, and pet owners through the insurance process. 
  • Jim, the claims chatbot that tracks data and suspicious activity to make suggestions based on customers’ needs. 
  • Cooper, the internal chatbot that connects various workflows between teams to help assign tasks, prepare testing environments, and run automated tests. 

Each of these chatbots, with its specific goal, helps customers and employees through conversation – collecting internal and external data that allow it to make decisions and respond appropriately.  

Maya and Jim’s ability to complete processes has eliminated the need for paperwork and has shortened Lemonade’s payout time. Maya ensures customers are paid within 3 minutes and insured within 90 seconds. While Jim handles over 20,000 claims a year with no human commitment. After interacting with the two chatbots, Lemonade customers are happy with their conversational experience, with a satisfaction score of 4.53 out of 5 stars

A glimpse into the future: What’s next for insurance chatbots?

AI chatbots are changing the insurance industry. Companies embracing this new technology can offer innovative solutions to improve customer experience, streamline operations, and mitigate risks.

Here are some of the most relevant chatbot trends for insurance companies: 

  • Voice-activated assistants: The most popular voice assistants, including Amazon Alexa, Google Assistant, and Apple Siri, transformed how customers interact with their devices. And now, they’re also changing the way customers interact with brands. Soon, we’ll see voice-enabled assistance for policy queries, claims filing, and general insurance information through voice commands – providing a convenient, hands-free experience. 
  • More devices, more insight: As AI develops, its ability and use on various devices alongside smartphones will expand. From cars to fitness trackers and watches, insurance chatbots will be fed more data that helps them understand customers better – helping insurers tailor products, pricing, and service to customer needs and behaviors. 
  • Personalized risk assessments: Insurance chatbots are sure to further develop predictive analytics powered by AI to assess risks more accurately. Through data such as customer demographics and behavior, as well as economic trends, insurers will be able to predict and price risks, while offering more tailored policies. 
  • Proactive risk mitigation: Blockchain technology and augmented intelligence will change data security, fraud prevention, and decision-making processes for insurers. The sensitive customer data that blockchain manages can streamline claim processing and prevent fraudulent activities. Meanwhile, augmented intelligence provides actionable insights to help insurers make informed decisions quickly and accurately. 

Chatbot technology is ever-evolving. Which is why it’s important to have an adaptable and scalable solution that can help you implement the most relevant technology. Deploying a chatbot on multiple channels, implementing new features and functionalities, and testing out new use cases are all part of providing a revenue-driving chatbot experience. Working with an easy-to-use platform and industry experts takes the guesswork out of actioning these changes – and saves you and your teams time and money in the long run. 

Taking the first step: Are you ready to embrace the chatbot revolution?

Chatbots in insurance are here to stay. The positive outcomes they’ve brought to insurance companies and policyholders are immeasurable – turning long, tedious processes into fast, pain-free experiences

Onboarding new customers, collecting documents and claims, offering 24/7 assistance, and automating policy renewal processes are only some ways that insurance chatbots help reduce costs and improve customer satisfaction. Powered by AI technology, insurance chatbots can provide a human-like, conversational experience where they can market, sell, and support customers – offloading tasks from your customer service agents and increasing workflow efficiency. 

Like any new and developing technology, finding the right solution that fits your business needs is essential. Leaning into expert advice and easy-to-use platforms are the recipe for successful chatbot implementation. Which is why choosing a solution that comes with a professional team to help tailor your chatbot to your business objectives can serve as a competitive advantage. 

Infobip is helping us personalize our communication with customers including simplifying complex processes and automatizing notifications. Adding Infobip’s solutions has enabled our clients to feel more guided and well-informed.

Ana Zovko

Chief Digital Officer, Croatia Insurance

Explore the world of AI

Mar 12th, 2024
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Senior Content Marketing Specialist

Martina Ivanović

Senior Content Marketing Specialist