3 Ways AI in Commercial Insurance Can Improve the Customer Experience

Artificial Intelligence - December 18 2019

Artificial Intelligence (AI) provides commercial insurance brokers and carriers with new opportunities for real market and competitive differentiation. With natural language processing and machine learning solutions, insurance companies can automate uninteresting, manual, time-consuming processes that cause friction across the whole insurance value chain and directly impact customers.

In commercial insurance, where insurance forms and documents are not standardized and policies are typically hundreds of pages, insurers who adopt AI solutions to achieve real-time data extraction and digitize workflows can realize significant benefits, including:

  • 50% more underwriting capacity
  • Improved quote to bind ratios
  • Substantially faster customer response rates
  • Improved employee engagement
  • Reduced risk of E&O exposure
  • Ability to bring new products to market faster

With AI-powered solutions for commercial insurance, all of this can be achieved without hiring additional staff and all while delivering a better overall customer experience.

In a low engagement category like insurance, customer experience plays a key role in repeat business and brand reputation. Typically, policyholders only interact with their broker, agent, and carrier when they need to file a claim, add coverage or need to renew a policy. Therefore, it’s critical to deliver an optimal experience at every possible customer interaction. Customers expect fast responses, accuracy, and friendly, effective communications.

Last fall, I had my own bad brand experience with a seasonal service that, much like insurance, is a low engagement category. When I took my automobile to be oil undercoated, the receptionist was not welcoming. She bellowed at me for arriving five minutes late and abruptly snatched the keys from my hand. As you can imagine, I was stunned. As a paying customer, I expected to be greeted in a much more customer centric pleasant and professional manner. I vowed that I would never interact or engage with this business ever again. Since that day, I have received multiple discount coupons which I have dismissed and thrown away. It was such a bad experience that they could offer the undercoating service for free and I would still not do business with them. They might offer a good product, but the delivery of a good customer experience was lacking and there are other options. Although this was an example of a bricks and mortar consumer experience gone wrong, when it comes to insurance, the internet and the “Amazon Affect” have exposed customers to a plethora of options and increased customer expectations. Customers today do not delineate their shopping behaviours and expectations between personal and business – they expect the same customer centric experience whether it’s a personal expenditure as they do when making a business purchase like commercial insurance.

Brands that create top-notch experiences across all customer touchpoints will leapfrog the competition.

Customer experience is the customer’s perception of the company based on their interactions with the brand across all touchpoints within the customer journey from initial contact to the purchase of insurance to customer service to policy renewal. The customer experience is paramount and plays a key role in our “digital” world, as it can lead to a reduction in customer churn, create brand advocates for life, reduce customer service costs, and support growth.

80% of customers say that experience is just as important as a product or service – NUVI

Research tells us that customers are willing to pay for a better experience and customers that have a good experience with a brand will pay a premium price and help grow a business through referrals by sharing their experiences with others. Commercial insurance carriers and brokers who offer a bespoke insurance solution bundled with an exceptional experience will gain a competitive advantage.

It’s no longer enough to have a rich portfolio of insurance products; customers are seeking exceptional customer service. They expect commercial insurance brokers and carriers to engage with them on a deeper level. It’s no longer acceptable to wait weeks and months for quotes or to receive policies that have errors or are missing coverages. Or worse yet to receive no response to a quote request at all. Technology makes it easier to respond to customers quickly and efficiently. So, how does AI empower commercial insurance brokers and carriers to deliver a better experience?

Here are three ways that artificial intelligence can improve the customer experience:

1. Produce and distribute error-free policies

Don’t leave it to chance that your policies are accurate. Automate the verification of all policies to ensure accurate policies are delivered to policyholders. Skilled knowledge workers conducting random monthly policy spot checks will not ensure that all policies written are accurate. Given the length and complexity of commercial insurance documents, fatigue and tired eyes can expose the firm to the risk of costly errors and/or omissions. Outsourcing insurance policy checking to third party vendors can be expensive and time-consuming. With an artificial intelligence solution designed for commercial insurance that contextually understands insurance language and data points, insurance brokers and carriers can use an on-screen checklist to automatically inspect the entire policy for potential E&O in minutes. By enabling carriers to deliver accurate policies to brokers, AI-powered policy checking can help you garner preferred “carrier of choice” status with brokers, who, in turn, benefit from being able to confidently deliver error-free policies to policyholders.

2. Improve response times to brokers and policyholders

Assigning skilled, proficient underwriters to manually sift through thousands of applications or submissions daily to find the submissions that meet the organization’s risk appetite and are the best for the bottom line is no longer efficient or sustainable. With more choices available in the market today, including new entrants that are using modern technologies to offer faster responses, traditional commercial insurance carriers can no longer continue to use manual processes and take weeks or months to respond to applications. Assigning junior underwriters to manually scan applications is not a good use of their time. Alternatively, by deploying natural language processing and machine learning solutions designed for commercial insurance that are able to read digital insurance submissions, applications and accompanying artifacts hundreds of times faster than a human, not to mention with greater accuracy, and automatically flow extracted data into core workflows and systems, underwriters can focus on more important judgement work, risk management, pricing strategies, and the customer. By automating the application intake process to enable straight-through processing, insurance carriers can auto-decline, auto-route and auto-prioritize submissions to deliver quick responses to brokers, quote desired business faster and allow underwriters to focus on more strategic work rather than mundane, low-value tasks.

The value of AI underwriting will surpass $20 billion by 2024 from $1.3 billion this year, according to a recent estimate by Juniper Research.

Automating the process of triaging submissions boosts underwriting capacity, increases quote to bind ratios and enables insurance carriers to win more business.

3. Strengthen broker and policyholder relationships

By automating high-volume, high-touch underwriting tasks like re-keying data everywhere, reviewing applications and all artifacts to identify if it is business that meets the risk appetite, you can free up knowledge workers to nurture existing and new relationships with brokers and policyholders. Your skilled knowledge workers are able to spend more time getting to know more about the customer, providing high-quality advice including coverage recommendations. Ultimately, this permits skilled knowledge workers to focus on delivering a better customer experience.

Providing positive experiences will lead to greater customer loyalty which, in turn, will motivate customers to share their pleasant experience with others. Developing and adopting an AI strategy across commercial lines of business will bring greater efficiency and precision to policy underwriting, improve the customer experience, mitigate E&O risk and increase net premiums written.

“People will forget what you said, people will forget what you did, but people will never forget how you made them feel.” – Maya Angelou

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