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AI Can Help Life Insurers Hear What the Customers Are Saying

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Over the years banks, retailers, and telecommunications have embraced new technologies such as artificial intelligence (AI) and machine learning (ML) to enhance their customer communication and, ultimately, customer experience. While there may have been a time to sit back and see what works and what doesn’t, these are now proven technologies. Organizations in the life insurance space need to adopt this thinking or risk being left behind.

Not only is today’s customer more tech-savvy than ever and expects the same high levels of convenience from their insurers as they do from other companies, but the last few months have put a spotlight on the need for a better digital communication customer experience.

The renewed battle over federal and state annuity sales standards further emphasizes the value of addressing customers’ concerns.

(Related: 5 Ways Annuity Providers Can Use Tech for Fiduciary Compliance)

By meeting and, hopefully, exceeding these expectations, insurers can ensure customer loyalty in an increasingly competitive market.

That in turn comes with several major business benefits, including increased revenue.

Catching Up

Of course, this kind of transformation won’t happen overnight.

Historically, life insurers haven’t done well when it comes to customer communication. Within the last few years, more than 90% of insurers worldwide did not communicate with their customers even once a year, and many customers did not receive a single communication all year. Of those interactions, many were limited to claims and related advice.

In a world where highly personalized products and services, supported by relevant, easy to understand and contextual information have become the norm, that’s no longer viable.

In order to overcome that deficit, it won’t be enough for life insurers to simply retrain their staff and hope for the best. Instead, they need to embrace the kind of technologies that will have an immediate positive impact on customer experience.

Using AI and ML

Enter AI and ML. While some life insurers have adopted these technologies to great effect in the back office — to speed up claims processes and in fraud detection, for instance — they haven’t been used to anywhere near the same effect when it comes to customer communications, which is a missed opportunity.

AI improves customer experience through the analysis of data on hand in order to decide the next message that is best suited to each customer, based on actions taken with the insurer, demographics, and changes in life stages that change a customer’s needs.

By delivering the right message to the right person, at the right time, an organization can dramatically improve the customer experience.

That relevance and timeliness, meanwhile, is most likely to result in the response the business wants: a policy renewal, an upsell or a new sale.

As a subset of AI focused on automating tasks, ML can help decide which content is suited to a customer based on data on hand, such as past behavior, demographics and location, making it easier to deliver truly hyper-personalized communication.

There are several ways organizations incorporate AI in their customer communications beyond hyper-personalization and next-best-action messaging. These include customizing customer journey touch-points (ensuring that tone is appropriate when the customer has suffered a loss, for instance) and allowing customers to interact with communications using voice-enabled tech (such as smart devices). Integrating chatbots into customer communications additionally allows for one-way communication to become a conversation.

Making the change

By making these changes, life insurers can give their customers a markedly improved experience.

In doing so, they encourage loyalty and additional spend, which can ultimately benefit their bottom line.

Simply put, there are a multitude of reasons why insurers should embrace AI in their customer communications.

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Mia PapanicolaouMia Papanicolaou is the chief operating officer at Striata, a digital communications strategy company based in Johannesburg.