In the early years of digital transformation, life insurers vying for top market position leaned on the newest technologies to boost the speed and operational efficiency of their services.
Given the near-ubiquitous nature of digitization, the effectiveness of this approach may have run its course. Advanced technology, particularly AI, has become such a permanent fixture that it has leveled the playing field, no longer serving as the ace in the hole it once was for competing life insurers.
But AI is not a perfect solution for every pain point, and relying on it risks overshadowing the value of human touch. Insurers and agents can understand and address the varied needs, concerns and circumstances of individual customers empathetically – and for now, that remains beyond the realm of artificial intelligence.
After all, life insurance must be handled delicately. Beneficiaries who interact with insurers often do so at an especially sensitive time in their lives, which algorithm-driven systems are not yet best equipped to handle. Therefore, a life insurer’s true differentiator should be one that encompasses the best of both worlds, by leveraging technology that complements the human element of agent-to-customer interaction.
The Pivotal Role of AI
Considering its enhanced analysis and performance capabilities, AI has a pivotal role to play in simplifying and streamlining the complex processes that define the life insurance industry.
Filing insurance claims traditionally involved a series of cumbersome steps, from submitting information through navigating assessments, up until the payout stage. Likewise, underwriting for life insurance usually involves a drawn-out manual assessment of various factors such as age, gender, medical history and lifestyle choices.
Now, AI can significantly streamline risk assessment and pricing, allowing insurers to stay competitive while enabling policyholders to choose from an array of options tailored to their needs.
By simplifying the process, life insurers make coverage more accessible to a broader audience, which increases the likelihood that people will acquire a policy in the first place.
The Human Element
While innovative technologies have excelled in expediting insurance processes, their true success depends on the insurer’s capacity to use those tools to offer personalized support for families and inspire generational loyalty, a concept that would have seemed unimaginable just a few years ago..
Life insurance is a uniquely sensitive space because it encompasses so many highly personal matters: mortality, family well-being and financial security. For many, life insurance is more than a mere financial transaction – it signifies a particularly emotional and mournful time in a beneficiary’s life.
But it can also present an opportunity for insurers to foster emotional connections with the bereaved by helping to arrange grief counseling, plan funerals, write obituaries, settle financial affairs and navigate probate. To that end, traditional insurance agents have often been the most effective vendors of this service. Even amid the rise of digital processes, agents are guiding and comforting individuals and families through the difficult bureaucracy of policy purchasing and claims.
Although AI-driven chatbots and virtual assistants can provide responses and clarification instantaneously, they cannot fully replicate human compassion and sincerity.
For these reasons, some life insurance companies continue to offer policyholders the tried-and-true model of agent-customer relationships throughout the claims process, even as they roll out new digital-first offerings such as apps and platforms that redirect users to services for counseling, funeral planning and probate management, among others.
This personable, tech-blended approach not only reduces the workload for agents but does so without automating every interaction, thus preserving the vital human touch.
A Benevolent Blend
For all its bells and whistles, technology within the life insurance industry cannot operate in a vacuum. Digital processes still need that human touch to establish and maintain relationships and make policyholders and their families feel heard, seen and supported.
As marginal differences in speed and efficiency become less of a competitive factor, life insurers will have an opportunity to seek an alternative approach that strikes a balance between AI-driven automation and human interaction. This will ultimately result in a more comprehensive and supportive industry that not only meets the emotional needs of its policyholders but also drives an entirely new line of competition – one based on empathy and compassion.
