Digitization, Automation, AI Define Role of Human Agents in Insurance Industry
Digitization, Automation, AI Define Role of Human Agents in Insurance Industry
The digitization of the insurance industry is inevitable but human interaction is still an essential part of the process. Paul Ford, CEO of insurance platform Traffk, explains how the companies that will succeed are those that use data and automation to develop better products and help their agents become advisors.

Artificial Intelligence (AI) and automation hold a lot of promise for the insurance industry. When used correctly both have the ability to benefit companies, agents and policy holders. AI algorithms can create risk profiles in minutes or even seconds, enabling instant quotes and opening the market up to a wave of new products.(1) However, AI cannot and will not replace agents when it comes to relationship building. Instead, the role of AI should be to enhance and enrich the agent’s job, giving him or her more tools and products to help develop new client relationships and strengthen existing ones.

“Insurance executives need to understand how AI has already, and is going to continue, to reshape the industry and how essential agents still are,” said Traffk Co-founder and CEO Paul Ford. “Agents will be pivotal as they have a trusted personal connection with consumers through their networks. We think enabling agents with the right tools will help create a better experience for both them and the consumer, opening up insurance to a wider audience, and enabling more agent success in the future.”

The digitization of the insurance industry is already changing the way that agents work. Thanks to more self-service capabilities, agents don’t have to spend as much time on routine customer service questions and can instead focus on more business development activities to retain, cross-sell, or upsell customers. Switching focus can have a huge impact on the bottom line. Research across a wide range of industries has shown that increasing customer retention rates by 5% increases profits by 25% or more. The impact for insurance could be even higher since as a customer gets older, their insurance needs often expand.(2)

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As AI develops more policies for potential customers to consider, agents will need to take on the role of trusted advisor, helping customers navigate the intricacies of policies to determine which one is best for their situation and determine which ancillary services may be beneficial to them. The customer is counting on the agent to connect them with products that match their needs and to then help them get the most out of the services and products they buy.(3)

While automation has the capacity to provide a whole new world of possibilities for the industry, it cannot replace human interaction, especially when it comes to navigating complicating policies and stipulations. Customers want to have human contact in case AI cannot answer their questions.(4) To abandon all human interaction would have disastrous consequences.

By the numbers

  • 74% of people are likely to switch brands if they find the purchasing process too difficult.
  • U.S. companies lose more than $62 billion annually due to poor customer service.
  • After one negative experience, 51% of customers will never do business with that company again.
  • The #1 reason people dislike calling companies is the difficulty in connecting with a real person right away.(5)

Artificial intelligence has amazing possibilities. It can process more than 4,000 data points in minutes and analyze 20 years’ worth of mortality, demographic, health and government trends, resulting in a dynamic algorithm that can be used to make informed decisions. Data Science-as-a-Service (DSaaS) platforms can help insurance companies more precisely determine risk, create more appropriate products for their clients, and improve customer experiences. This enhanced data can also help insurance companies price products more accurately, be able to understand the demographics of who is ready to buy and get the right risk on their books—making them more profitable in the end. However, if customers can’t easily access that information or get frustrated because they don’t understand their options, they will instead purchase from the carrier that makes the process easy.

One area current legacy insurance companies are not mining, explains Ford, is customers with pre-existing conditions, most of whom are denied a policy. But current platforms can analyze the risk and identify policies for this group. The billions of dollars being lost right now are attainable by insurance companies that have adopted digitization, AI, and use current data.

Agents can also use data to work in tandem with their companies to create better products. Traditionally, the industry has developed new products based off exist ones instead of truly examining what works and what adaptations are needed. AI and DSaaS platforms can give carriers the tools to develop products based on demographic and risk data. Industry leaders can then incorporate agent input to curate and design products that meet policyholders’ needs.

Agents are necessary to build trust, be the bridge between big data intelligence and develop a personal connection. The agents interacting with the consumers are the ones who build relationships with clients and who can, based off the knowledge those relationships give them, help curate suggested data driven products to make insurance offerings more dynamic and desirable.

“While consumers are more often turning to digital channels to explore and investigate their insurance options and file claims, they still want to know that there is a knowledgeable, caring person they can turn to when they need personal help,” said Ford. “The companies that are able to successfully merge cloud-based, data-driven artificial intelligence technology with the traditional methods of engagement through their agents are the ones who will rise to the top.”

Source: Yahoo Finance

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