Conversational AI in Insurance: Benefits and Use Cases

Updated on Feb 6th, 2024


The insurance industry has been pretty stagnant in previous decades, but the recent technological changes are significant. The previous methodologies have completely changed, and the industry now leverages technologies like conversational AI, big data analysis, image recognition, and more.  

Conversational AI in insurance is something that has seen controversy, the fact that sentiments matter the most remains. People claiming insurance usually seek it in cases where they lost something, and humans can’t always remain empathetic. Conversational AI can fill this gap and provide a better service with properly implemented sentiment analysis.  

The above is just one of the many reasons we would discuss today, which makes conversation AI for insurance a must. Today, we will be briefly covering the benefits and use cases of conversational AI in insurance. If you have any questions about AI implementation, you can always consult and avail our AI development services 

Let’s get started with a brief intro to conversational AI.  

  • Conversational AI can entirely change how we perceive insurance and its servicing until now.  
  • The majority of how insurance companies operate for a customer can be improved with conversational AI in place.  
  • The major benefits include better customer experience while saving tons of costs.  
  • The data gathered through conversational AI can be used in the future for the betterment of the entire insurance business. 

What is Conversational AI? 

Conversational AI refers to technology through which customers can utilize the processes of a business using natural text and voice. The most common implementations of conversational AI are chatbots and virtual assistants. The basic purpose of insurance AI chatbots is to improve the ways a customer can interact with a business and avail themselves of its services. Conversational AI in the insurance industry is focused on providing customers with seamless claims and sales experiences.  

With more and more advancements in AI happening on a larger scale, conversational AI is improving as well. The chatbots implemented with the technology can cater to a vast set of requirements of all sorts of customers. The goal is to replace generic support and claim processing with an automated approach. Self-servicing roots the basic need of conversational AI and is very important for insurance services.  

Benefits of Conversational AI in Insurance


 1. Reducing Costs 

A majority of spending in the insurance industry revolves around maintaining the workforce. AI in insurance helps reduce those costs by replacing humans with software for various use cases. The most significant of these use cases is conversational AI, which can help support staff reduce major costs. A chatbot based on the technology can replace 1000s of agents working towards solving customer queries.  

2. Helping Insurance Agents 

Insurance agents have a hard time compiling a list of potential customers; with conversational AI in place, the information can be computed. Using the list, agents can reach interested customers directly, fasting the entire process. The data for an individual customer can also be mapped to their personalized profile for insights to be used by an insurance agent.  

3. Faster Claim Processing 

For anyone who has to use their insurance, claim processing is the toughest part. Conversational AI factors into account 100s of different parameters, which can help insurance companies process claims much faster. This can be deemed one of the best benefits of AI in insurance services, as a customer really wants hassle-free and fast claim processing.  

4. Quick Resolutions 

With AI working for your insurance company, customers won’t have to wait for business days or business hours. A quicker resolution system can be implemented to improve customer experience. People claiming insurance are usually already in distress; the best an insurance company can do is speed up the processes and provide quick resolutions. Conversation AI helps in doing so by generating relevant data for the company to compare and provide speedy resolutions.  

5. 24/7 Availability 

Unlike humans, AI doesn’t need rest or leaves or time off. Your systems would be working 24/7 for customers to raise claims, answer queries, and offer self-service. This benefit is especially for insurance agencies, as every minute counts when someone is in need of it. People usually fail to report claims in time, leading to a delayed process; with conversational AI in place, you won’t have to worry about missed intimations.  

6. Improve Customer Journey 

People are usually looking forward to a more streamlined process when it comes to insurance of any kind. Interacting with a program is far more convenient when someone is going through stress. It depends on how you want to take the situation and improve the customer journey. AI-based insurance solutions open up wide possibilities for improving the overall customer journey, it’s what you choose to implement.  

7. Data Gathering  

Gathering data is important for any company as it is, and more so for an entire industry based on it. Insurance companies require data to compute premiums and offer their services at optimal prices. Insurance AI solutions take the game leaps ahead; every piece of data generated in the conversation can be stored and used for future processing. The same can never happen in a human conversation, while the information just needs to be picked for chatbots.  

8. Better Quotations 

There are various competitors of insurance companies at any given time. A smart chatbot can provide quotations based on how things are working in the chat. A customer is usually there to make quick decisions, and it is indeed a spur-in-the-moment thing. While humans can be limited to biases, conversational AI can make real-time computations to offer better quotations leading to more conversations.  

Also Read- Enterprise AI: Driving the Business in Future

Conversational AI Use Cases for Insurance

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 1. Policy Servicing Through Which Users Can File Claims on Their Own 

Many insurers are now opting for self-service as a primary offering on their mobile apps. While it may sound simple, it would be far too complex for someone, and accompanying a conversational chatbot is the way out. The conversational AI assistant can help customers make tough choices, analyze uploaded documents on the spot, and ask for clearer pictures in case there is an issue.  

2. Fraud Detection to Improve Claim Settlement Ratio 

The industry suffers from way too many frauds; thanks to advancements in AI, these can now be detected earlier than ever. With real-time image processing and conversational chatbots in place, there are fewer chances of any frauds passing through the system. While humans tend to ignore small mistakes, AI can process it efficiently. Even a bit of modification in shared images can be easily detected in an AI-based insurance solution.  

3. Virtual Assistance to Help Customers File Claims 

A customer might not be able to do all the things all the time. It is usually their first time raising a claim as well. While the step-by-step approach is redundant for human support staff, an AI-based service agent built using conversational AI can take over. All information needed from the customer can be gathered easily through an interactive virtual assistant. The same can also be used to take direct commands and notify insurance companies of requests raised by customers.  

4. Claim Processing for Speeding Up the Process 

While you may be wondering how conversational AI would help in claim processing, it very well can. AI in auto insurance revolves around self-servicing videos, and the system can detect the videos in real time to ensure the damage and its legitimacy. It would speed up the process and help claim processing with a multi-dimensional approach.  

5. Cross Selling of Complementary Policies  

Cross-selling in insurance is a set practice used by companies offering multiple products, which they usually do. People are known to make purchase decisions within the conversation; your chatbot can help you sell policies without paying commissions. For example, AI in health insurance can be used to cross-sell life insurance if the program considers the person at elevated risk for diseases.  

6. Policy Renewal to Ensure No More Missed Expiration Dates 

Policy renewal is a process that needs as much simplification as possible. While implementing conversational AI, all you need to make sure is a simple process towards renewal, while the customer gets to choose what they want. The fast custom quote generation possible with AI plays a key role here and would help you retain more customers than ever. 

7. Integrated Payment Collection Mechanism 

AI can be put to use in cases where a custom quote is generated and insurance premiums can be paid within the chatbot. With this, you would ensure the customer won’t have to wait for anything at all, and renewals and new policies can be made within minutes. Multiple payment gateways can be integrated for users to have vivid options when they choose your insurance services.  

8. Live Support Mapping for Faster Responses 

There would be times when a customer would only want to talk to human support, and the AI-based system can help ease the process. With a simple click of a button within the conversation AI program, the user would be connected to available and suited support. NLP can be used to determine the gravity of the situation and it can be automatically transferred to support well suited to handle the issue.  

Future Possibilities of Conversational AI in Insurance 


Sentiment Analysis 

Improved sentiment analysis and personalized responses is what the industry strives towards. At its peak, conversational AI services would be able to differentiate the sentiments of a given user based on a 100s of different factors and weigh in response that even a human couldn’t. Sentiments are a vital part to weigh when considering the insurance industry, as in most cases users would be suffering if they are coming to make claims. With improvements in NLP and AI, we believe to see a much better version of chatbots than what we currently have.  

Meaningful Offerings 

For some house insurance is a must-have, for some other things might hold more value. A system with a well-implemented conversational AI would be able to gather this data over time. Targeted marketing campaigns in an industry like insurance could help you achieve massive success. While the same can be implemented now as well, the AI would eventually improve to offer perfectly meaningful options to people looking forward to purchasing insurance of different kinds.  

Next-Gen Tech Integration 

The conversational AI would be all set to be integrated with technologies like Blockchain and IoT to improve data security and leverage daily devices. IoT would help insurance companies gain better insight, especially in the case of health insurance. Conversational AI could also be gamified as an approach to appeal to a wider audience. The benefits could include lower premiums, personalized insurance plans, building vivid data sets, etc.  


Ready to Implement Conversational AI? 

AI insurance services are ready to take over, and as soon as you implement them, the better will be. The entire insurance industry is facing competition, and the only way to stand out is by offering exceptional services. Our custom insurance software development services ensure you get the best out of your investment in AI. Our developers are experts in NLP and would create a perfect conversational chatbot for your insurance business. Contact us for a free consultation, and we would be happy to assist you with all your AI requirements.

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