Meera AI
Challenges Facing the Insurance Industry and How to Overcome Them
3rd Sep, 2020

Strategies to Sustain Your Insurance Business Through the Pandemic?

The coronavirus outbreak has had a tremendous impact on how businesses and industries operate. Insurance industry, in particular, has felt the brunt of the abrupt disruption introduced by the pandemic. Insurance companies and businesses play a vital role in reviving economies. But the global health crisis and the increased volatility of the market has put immense pressure on the industry.

The global insurance industry lost US$ 4.2 billion due to the pandemic until May 2020. The estimated value of the losses is further expected to worsen. According to Willis Towers Watson, the insurance industry is expected to lose US$11 to US$140 billion while Bank of America predicts the losses to be in the range of US$ 30 to US$ 97 billion dollars. The losses can be attributed to the following factors:

  • Increased operational costs to manage crisis
  • Lack of revenue and premiums from many lines of businesses
  • Constantly changing claims landscape
  • Regulatory pressure

Use of technology to digitize operations is fast emerging as a lethal weapon to combating the uncertainties of the pandemic. Before we delve into the tools and technology that can be used to sustain through the crisis, let’s take a look at the major challenges and changes that the industry is facing.

Shift to Remote Work

With numerous government regulations in place around the world along with the social responsibility of keeping employees safe, insurance companies have quickly shifted to remote work. The quick shift to remote work disrupted operations in the beginning but both employees and organizations have now settled down and are faring well. However, working from home may have an impact on employee productivity. The situation warrants organizations to communicate frequently and effectively with their staff.

Customer Query Overload

Changing government regulations, heightened fear of developing ailments, cancelled trips, business disruptions, and claims processing are some of the causes that have made the customers anxious. Due to these factors, insurance companies have registered a significant surge in the number of queries, complaints, and inquiries. With contact centers operating on reduced staff, organizations are struggling to keep up and respond to these queries. The trend is also resulting in companies losing business as customers are looking to invest in health and life insurances. This has exposed the dire need for automatic information dissemination in the industry.

Claim Management

Restricted mobility, fear among people, and the need for social distancing is proving to be a barrier in assessing and processing claims for insurance industries. Because traditional claims management depended on face-to-face exchanges with insurers or agents, customers are finding it difficult to adapt to the digitization of the process. However, digital claims processing is gradually gaining impetus and is expected to become the new norm in the industry.

Marketing and Customer Acquisition

One of the biggest challenges faced by the insurance industry is how to scale their business amidst the coronavirus outbreak. Footfall at insurance offices has fallen drastically since the start of the pandemic and the number of people who could stay in the office at once has been capped. With prospects staying home and avoiding cold calls, marketing has become difficult. Besides this, email response rates have also taken a hit deepening the crisis for the industry. In the current scenario, insurance marketers and agents are struggling to contact prospects and leads even with demand for health and life insurance products on the rise. This has negatively impacted the industry’s revenue. The situation demands for the use of consumer-friendly and non-disruptive channels of communication.

Communication and Automation – The Keys to Surviving COVID-19

The situation warrants the insurance companies to fix operational inefficiencies and communicate effectively to scale and sustain their business through the pandemic. An effective tool that offers the means to achieve the objectives is conversational AI. Powered with machine learning and natural language processing capabilities, conversational AI is used to automate and streamline communications. Conversational AI can help insurance companies tackle the aforementioned challenges in the following ways:

Automated Information Dissemination System

Conversational AI assistants can help insurance organizations handle the increased influx of queries and reduce channel overload. AI assistants can answer frequently asked questions without the need for human intervention. Besides this, conversational AI can handle thousands of queries simultaneously enabling insurance companies to work with reduced staff. Acting as an automated information dissemination system, conversational AI can answer queries 24×7 adding to customer experiences and improving brand value.

Personalized Marketing

With cold calling and emailing proving ineffective, conversational AI is proving to be a communication enabler between companies and prospects. The technology makes it possible by using consumer-friendly and non-disruptive text messaging channels. It further improves the efficacy of marketing campaigns by personalizing conversations and messages. Using these features, conversational AI warms up prospects and leads for calls with insurance agents boosting contact rates and the lead conversion rates.

Employee Engagement and Support

Conversational AI also provides a medium to allow companies to communicate with their employees. AI assistants can be used to automate feedback collection from employees and the date can be used to organize engagement activities to boost the mental well-being of the staff. Conversational AI can also be used to keep employees informed about the changes in operations and policies.

Automated Information Collection for Claim Management

The AI-powered chatbots can be used for information collection during claim management. By doing so, the conversational AI can collate all the necessary information required for claims processing and send it to the respective employees. Leveraging the process, insurance companies can take significant load off their employees while streamlining and speeding claim processing and management.

Conversational AI allows insurance organizations to improve operational efficiencies, automate communications, and work with limited staff. This enables insurance companies to cut down on costs, boost conversion rates, and craft exquisite customer experiences. Due to the wide ranging benefits it offers, conversational AI is a must-have tool to survive and scale business during and beyond the pandemic.