Since the launch of OpenAI’s ChatGPT in November 2022, the concept of generative AI (Gen AI) has sparked a universal interest that spans beyond industries, geographical borders, and even generations.
Everyone–from CEOs to your grandma—has inquired about the transformative technology, and now companies are learning how to harness it. In the ever-evolving and competitive landscape of the insurance industry, companies need to stay ahead by anticipating, navigating, and addressing growing customer expectations and emerging challenges to mitigate the risk of becoming obsolete.
One of the challenges the insurance industry is facing is how to leverage emerging technologies to streamline processes and enhance customer experiences.
Through my role at Clearcover, I have discovered that success with Gen AI comes from identifying the places in the customer journey where AI can supplement or enhance the experience.
Though we’ve seen substantial operational efficiencies and high percentages of customer adoption, the journey to our recent launches taught us three important lessons that can help other product and innovation teams ensure that customers receive personalized, empathetic service via advanced Gen AI technology.
See also: AI and a Vision for Safer Roads
1. AI can improve customer experiences: Gen AI products can allow for customers to receive around-the-clock support, addressing their queries well outside standard operating hours. One area we targeted at Clearcover was offering a 24/7 support system, developed in partnership with Ada, which ensures that our policyholders receive prompt assistance while having our human agents remain available for much more complex inquiries. Since the solution launched in April, more than 40% of our customer-facing chats no longer required human intervention. We estimate this could result in at least a 1% servicing cost ratio improvement at scale.
2. Collaboration is crucial: Streamlining processes requires cross-functional collaborative efforts of all your teams, including in data science, product, compliance, claims, and customer service. Our teams identified a way to streamline our claims process even further by using large language models immediately following the submission of a claim (first notice of loss, or FNOL). Our AI extracts key details of the claimant’s account and asks relevant follow-up questions. This technology creates fewer hassles for the customer, who provides real-time data to the claims representatives up front, enabling fewer back-and-forth conversations and faster payouts. Since launching in March, we’ve collected 140% more information per claim while on average only asking the customer seven additional questions.
3. It’s about enhancing, not replacing: Gen AI should augment and empower your human workforce. By leveraging these tools to streamline processes, you enable your employees to prioritize delivering personalized, empathetic experiences. In fact, according to a 2023 report by Hubspot, 78% of customer service professionals surveyed said they believe AI helps them spend more time on the more important parts of their roles. An example of this at Clearcover is our AI-powered Claims Assistant, which has revolutionized how our adjusters operate. By rapidly summarizing extensive claim files, providing insights, and drafting initial denial letters, the AI “assistant” empowers our human experts to focus on the nuances of each case. We launched this internal-facing tool in late January, and in a short time, it generated 740+ summaries and answered 540+ questions, saving around 730 hours.
See also: We Need to Rethink the Future of Cars
The use of Gen AI in insurance is brimming with possibilities – from revolutionizing underwriting and risk assessment to detecting fraud more effectively. However, as our journey has highlighted, the key to unlocking this potential lies in striking the right balance between technological capabilities and preserving the elements customers value.
We're committed to staying agile, fostering cross-team collaboration, and maintaining a customer-centric approach that prioritizes both technological advancement and human empathy. As others in the industry join us in this pursuit, we are collectively working to redefine the insurance experience through the blend of Gen AI and human expertise.
