Insurance AI
October 15, 2020 • 5 minute read

Four Ways Insurers Can Improve CX for Market Differentiation

In recent years, the insurance sector has experienced an uprise in disruptive innovation. Combined with the disruption caused by the pandemic, there is a huge opportunity for insurers to transform the way that they do business, especially in customer experience. This digital transformation, especially with respect to personalized self-service, efficiency, and speed, can be a major differentiator as insurers seek to stand out among their competition.

Whether it’s processing a first notice of loss or obtaining benefit information, when policyholders reach out to an insurer it’s because they need help. Providing quick, effortless customer service anytime and anywhere is vital to meet policyholder’s expectations (and beyond). Here are four ways that insurers can improve their customer experience to meet these expectations, as well as stand out from their competition for lasting loyalty.

#1:  Make an Investment in Digital Transformation and AI

Dealing with these new challenges and opportunities requires changes to both insurers’ IT systems and business processes. Insurers need to think about their policyholder lifecycle, from discovery and exploration through quote, bind, and use. Insurers will then need to consider how technology will come into play. In a recent survey by Celent, virtually all insurers agreed that digital transformation was a critical part of their customer experience and channel improvement strategy. 

Robert Lajdziak, senior consultant for insurance intelligence at J.D. Power stated, “[This] has huge implications for the industry because [the CX trend] puts the focus squarely on digital investment to notably expand creating seamless customer touchpoints.”

At the heart of digital transformation is Conversational AI, and indeed, insurers are beginning to deploy AI to enhance customer experience. 

#2: Adopt Technology-driven Claim Service

The claims process, especially in light of the COVID-19 pandemic, is a busy and overloaded operation for insurers. With increased customer demand for filing claims and for assessing claim status, automation can drive operational efficiency. Many steps in the claims process can be automated through Conversational AI to increase efficiency, reduce fraud, increase transparency, enhance ROI, and build a community of content customers.

Insurers need to streamline and improve the claim and inspection process for customers. The goal is to make them more efficient and effective to handle First Notice of Loss and manage claims.  Matthew Josefowicz, CEO of Novarica Inc., recently told WSJ Pro that AI is playing a significant role in processing claims in the insurance arena. He also acknowledged that AI is an important part of optimizing customer experience and market engagement. An Intelligent Virtual Assistant (IVA) is non-judgemental, efficient, and can handle claims with empathy.

#3: InsurTech to Meet the Increased Demand by Consumers for Technology Innovation from Insurers

InsurTech refers to the use of technology innovations for the current insurance industry model designed to improve customer experience and optimize ROI and efficiency.  Today, InsurTech is a $2.6 billion sub-industry that stands to either disrupt or empower the incumbents of the insurance industry. Since insurance entities typically keep an eye on what their peers are doing, they seem to be trying to catch up with their competitors around customer centricity and their willingness to play in the new InsurTech space. This approach will position insurers to be ready to improve customer experience.

One goal of InsurTech is to enable insurers to satisfy consumers’ demand for personalized coverage, improve direct interaction, and make coverage more affordable for consumers and more profitable for providers. Also, increased sophistication of automated data collection methods will empower insurance providers to better tailor products, better serve their customers, and increase the long-term viability of their companies.

#4: Addressing Policyholder Forbearance

Forbearance is when an insurer allows customers to temporarily pay their policy premiums at a lower payment, or even pause payments, which helps customers deal with hardships, such as the financial fallout from the COVID-19 pandemic. On March 27, 2020, the NAIC issued guidance encouraging insurers to work with policyholders who become unable to meet their contractual payment obligations because of the pandemic. For insurers, this means that they need to be flexible over premium payments and requests for relaxing premium due dates and other deadlines. For claims, insurers also must exercise flexibility in enforcing time restrictions for claims handling, notifications, third-party administrator audits, and regulatory filings. Insurers can utilize IVAs to automate complex transactions like payment arrangements that involve back-and-forth dialogue leveraging account-level data and personalization. 


Many insurers have come to realize that they are evolving towards becoming technology companies. In addition to adopting Conversational AI for customer experience, insurers also need to have better digital and cross-channel customer experiences that link back to their current systems. New technologies are most definitely lowering operating costs and creating new modes of interaction. Insurers have to be agile in implementing the right technology to meet changing customer needs. Above all, technical architecture in insurance must be oriented toward enhancing and improving customer experience.

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