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5 Best Use-Cases of Chatbots in the Insurance Industry

Fast-paced innovations driven by advancements in technologies such as Robotic Process Automation (RPA), Artificial Intelligence (AI), Machine Learning (ML), and Blockchain have led to unprecedented changes in customer expectations. Customers in the Insurance industry are now looking for seamless, effortless, hyper-personalized experiences, and expect instant responses through self-service tools.

With the increased familiarity with digital technology, such as chatbots, modern-day customers are comparing their experiences with their insurers on any digital platform with other available options (from travel to a food app. service and product providers), often judging a brand based on this digital experience.

According to Insider Intelligence, nearly 40% of internet users worldwide prefer interacting with chatbots to virtual agents, and with major industries including retail and healthcare turning to digital technology, chatbots will likely increase in popularity moving forward. Such trends have made it imperative for small and medium-sized insurers to bring about a paradigm shift in the way they interact with existing and prospective customers and adopt an integrated, omnichannel self-service and automation solution.

Insurance chatbots can bring your business to the next level at a very low investment. They can enable you to free up resources so your team can focus on higher value activities, improve customer satisfaction scores and retention rates through better interactions, and reduce churn rates by providing proactive support at key moments like renewals or claims filing deadlines – all while reducing cost-to-serve by eliminating manual workflows!  In this article, we will explore the popular applications of chatbots for insurance companies. Let’s get started.

They Drive Effortless Customer Engagement

Several different types of chatbots are being developed for insurance companies. The chatbots aimed at reviving customer experience(CX) typically leverage technologies like Artificial Intelligence (AI) and Natural Language Processing (NLP). Insurance AI chatbots engage customers by helping them understand the products and services better. The intelligent bots interact with customers and then work on understanding their needs. If the customer has any query or doubt, then the chatbot can resolve it and help the customer in decision-making. Chatbots are a great customer engagement tool. They can respond accurately to simple queries, manage the profile of the customer, provide a summary of a policy or claim and even help with payments.

They Enable Uninterrupted Customer Service

Chatbots can be a part of the customer deflection strategy for small and medium-sized insurance companies and are deployed as one of the key channels to address customer queries. It can be used to handle routine, repetitive, and complex tasks. They can also be used to handle tasks that are not easily automated. For example, if you have a customer service chatbot that handles incoming calls from customers within your company, it will answer questions about insurance policies by referring them to human employees or digital assistants who can resolve their issues empathetically over email or phone calls. The insurance chatbot does not need any special training because its sole function is answering questions about insurance policies so there’s no need for additional learning as far as how such services work when in use by humans versus machines (e-commerce transactions).

Moreover, their round-the-clock availability ensures the availability of uninterrupted customer service at all times. Customers may have concerns or questions outside of your specific customer service hours. Insurance chatbots can step in and offer 24/7 services without putting an extra burden on your employees.

They Assist in Long-Term Care Planning

Chatbots have widely impacted the entire insurance industry, including long-term care (LTC) insurance. LTC insurance is sold in an array of ways and through various channels. However, when customers look into the options for purchasing this type of insurance, they soon realize that there aren’t many choices available in terms of pricing or coverage amounts. With chatbots now available as an alternative way to compare quotes and find the best value for customer needs (and budget), insurance agencies can bring transparency back into this process by giving consumers access directly through their mobile devices instead of having them go through an agent first.

They Deliver Real-Time Policy Updates

Chatbots can help customers with their insurance needs by providing them with information on the status of their policies and the details of any claims or coverage changes. For example, if the customer has a health plan that covers their child’s braces, chatbots can inform them when it’s time for their child to get their next set of dental appliances replaced and what costs are associated with this process. Chatbots can also provide quick answers about whether or not someone qualifies for certain types of coverage based on their age or gender—and what the cost would be if they do qualify! Similarly, chatbots can send messages alerting customers about policy renewals and even collect premiums with zero human intervention.

They Drive Efficiency Through Automation

Chatbots are very useful for automating some of the more routine or repetitive aspects of the insurance business. For example, insurance chatbots can be used to automate the sales process by letting a customer interact with a bot and receive personalized information about their coverage options and generate an insurance quote as well. The chatbots can also suggest relevant products to the customer basis their interaction and convert the opportunity for cross-selling and up-selling to a sale with a higher probability. They could also be used to automate customer service by providing automated responses based on data analysis and consumer behavior analysis.

Chatbots can help insurers in claims processing through the automation of certain tasks that are currently handled manually by humans (such as documenting injuries). For example, a customer can avoid constant follow-ups with a customer representative to check the status of his/her claim with the help of a chatbot which can pull up the customer’s policy from the company’s CRM post gathering the information about the nature of claims from the customer during the interaction.


Insurance is a complex business, and there’s no doubt that chatbots for insurance companies can help make it easier for both customers and insurers. By automating mundane tasks like policy renewals, insurers can focus on more important things like customer service, sales, and product development. Furthermore, conversational Artificial Intelligence is the future of insurance chatbots wherein customers can get instant and accurate responses to their queries. It will help insurance businesses to engage customers and offer high-quality customer service with informational intent.

Written By

Faheem Shakeel is the Principal in the Insurance practice at Damco Solutions. With over 15 years of digital transformation and business consultation experience in the InsurTech space, Faheem Shakeel is an expert in insurance technology services and solutions. He has built leading COTs insurance products and helped several insurers across the USA, UK, and the Caribbean embrace the latest technologies and innovations.

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