AI’s Impact on the Role of Insurance Agents

By December 18, 2018 February 18th, 2020 Blog
Insurance Agents and AI

While AI capabilities, both current and emerging, AI may seem like Santa Claus, coming in bearing gifts for all everyone in the insurance industry. However, there is one section of the industry that may find its role being redefined and reshaped extensively – the insurance agents. But will the impact make them turn into the Grinch or can they too rejoice with the St Nick’s jingle bells? We will discuss this crucial question in this article.

The insurance agents have been an integral and indispensable part of the insurance machinery for as long as the industry has existed. They have adapted and survived many changes from digitization to severe licensing regulations to scrutiny of selling practices.

Between the advent of AI and the increasing inclination of customers to self-service their insurance needs, they are finally looking at a level of impact that may make their role either completely redundant or turn it upside down.

Let’s look at few reasons for this probable prediction:

1. AI has already made the claims settlement process faster and more accurate.

With machine learning, it is now possible for a smartbot to settle claims faster and with more accuracy without any human assistance.

Once a claim is logged, the bot typically follows this process: Insurance Agents and AI

This process allows settlements of small and mostly authentic claims faster and saves a lot of resources and time. In the entire process, the agent has little or no function. Even logging the claim can eventually be undertaken by AI tools, such as drones or service bots.

2.  AI has the capability to improve customer satisfaction.

AI-driven analytics can draw insights from the customer data and find patterns to identify dissatisfaction levels of customers. They can study behavioral markers by analyzing various types of customer data – recorded calls, social data, online search patterns, and other similar data points.

3.  Premium calculation is largely automated and is derived from historical data.

It is impossible for insurance agents to always get right the insurance premiums. They rely on software to calculate it even today. However, the parameters used to calculate the premium are narrow and hardly foolproof. People can lie about their habits and past records, or simply forget vital information. An agent may or may not catch all mistakes. With increasing connectivity of databases, an AI-enabled insurance system will be able to access all relevant historical data of the insured, and calculate a premium based on their lifestyle.

To summarize, insurance agents may eventually concede the following function to an AI-enabled insurance engine:

  • Collecting and calculating premiums
  • Sending reminders for renewal
  • Claims settlement processing
  • Customer satisfaction surveys and ratings
  • Cross-selling messages and information based on interactions
  • Customer retention with offers at lower costs or extra benefits
  • Multi-channel service to customers with uniform experience across devices

It is clear that the traditional roles of agents may definitely be over. However, there are many different ways that agents can upgrade their roles with the help of AI.

        1. Apply AI-enabled analytics to serve more customers in a focused way.

AI-based tools can deliver customers ‘synopsis at the agents’ fingertips, allowing them to customize their approach and offerings. This focused approach saves time and also increases customer satisfaction. For example, offering customers proactive tips to keep their premiums in check is a vital part of customer service. While self-driving cars may eventually take care of this aspect, as all insurance premiums will get linked, there are a lot of touch points that may require the help of an agent. 2. Tap social media to get customer insights on a broader level.

Social media has quickly become a platform for people to share their lives and lifestyle. It is possible for agents to leverage this platform to increase awareness and run targeted campaigns to upsell and cross-sell their products.

        3. Use AI-enabled analytics to cultivate relationships with customers.

With seamless experience becoming a possibility across multiple channels, agents can now shift from being a carrier’s representative to being a customer advocate.

The industry is known to be the slowest adapter of change and technology, but it can no longer afford to do so in the wake of increasing technological advances and expectation of consumers who have become accustomed to using advanced tools in other industries.

Traditional roles of insurance agents may be disappearing, but leveraging AI can help them stay relevant and even thrive in the automated, technology-driven world. There are still many things that need the human touch and the agents have the opportunity to become more customer oriented and be a bridge between consumer requirements and the insurance carriers.

Sachin Janai

Sachin Janai

Sachin is an IT thought leader with 20 years of Technology experience including 14 years in the financial services industry. He has extensive experience of working in the USA with organizational and technical leadership in the space of Consulting, Banking, Insurance, Healthcare, Manufacturing, and Transportation domains. He has a successful track record of executing challenging technical programs and has driven $14 M+ of business value motivating and leading energized, high-performance teams. Read More Posts

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