3 Ways Insurance Brokers Can Cut Costs

Artificial Intelligence - July 10 2019

Artificial Intelligence (AI) provides a plethora of business benefits to insurance brokers including a game-changing boost in capabilities and a reduction in operational costs. With shifting customer expectations, new market entrants, and tight margins, traditional business models are being challenged forcing insurance brokers to embrace radical change. By digitizing and standardizing core operations such as policy issuance, administration and claims, brokers can leapfrog the competition, lower operating costs and deliver a better customer experience.

With the rise of the millennial buyer, insurance brokers need to find new ways to sell to audiences that are accustomed to being reached and interacted with very differently. Whether in personal or commercial lines, the millennial generation has tremendous buying power and will soon become the insurance industry’s primary customer. This new buyer expects instant gratification, exceptional customer service and interactions with knowledgeable staff. 

So how can brokers cut costs while meeting these new challenges?

In complex lines that require more sophisticated underwriting, brokers who adopt technology like AI to re-imagine existing processes will be able to creatively differentiate on service. With a purpose-built AI solution for insurance , brokers can reduce operational costs, sell more, and deliver a better customer experience.

Staff Augmentation

AI and Natural Language Processing (NLP) solutions can extract data from unstructured data sources like quotes, policies, endorsements, and binders hundreds of times faster than a human and with greater accuracy. Eliminating the need for skilled knowledge workers to spend hours manually comparing quotes from multiple insurance carriers, manually checking new policies for errors and omissions, and re-keying data into rating engines and other back office systems, can significantly reduce operating costs. By augmenting existing human skilled workers with digital employees, skilled workers can spend their time on strategic customer facing initiatives focused on value creation, deepening customer relationships and selling more.

Digitizing and standardizing routine, predictive tasks like re-keying and comparing quotes in Excel spreadsheets frees up the time of skilled knowledge workers allowing them to focus on account management and other value-add initiatives that drive customer retention and satisfaction.

Reduce Errors & Omissions

To err is human. With purpose-built AI solutions for insurance that read like a human only faster and with greater accuracy, insurance brokers can streamline and simplify the quote-to-bind process by automatically comparing expiring policies, binders, quotes and more with new policies to quickly and accurately identify errors and omissions in seconds.

Minimize risk by eliminating the dependency on humans to manually find errors and omissions. Using an electronic policy checklist allows skilled knowledge workers to focus on resolving inaccuracies and insurance carrier communications, rather than the mundane task of manually checking policies. In one case, a commercial insurance broker who deployed AI to automatically check policies was able to save a potential $1.5 billion in errors and omissions.

Brokers leveraging artificial intelligence have the capacity to significantly improve policy turnaround times and empower their skilled knowledge workers to focus on deep customer interactions.

Improve Customer Retention

New customer acquisition is expensive and typically far outweighs the cost of repeat business with existing customers. By leveraging a purpose-built AI solution for insurance, brokers can automate and standardize routine administrative tasks allowing skilled knowledge workers more time to focus on the human connection with customers. Getting to know customers better, gaining a greater understanding of their needs now and in the future, deepens customer relationships and enables brokers to offer bespoke services. Delivering a better customer experience will improve customer retention and lower customer acquisition costs.  

In complex lines that require more sophisticated underwriting, brokers who adopt technology like AI to re-imagine existing processes will be able to creatively differentiate on service. With a purpose-built AI solution for insurance, brokers can reduce operational costs, sell more, and deliver a better customer experience.

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