AI for Insurance Brokers to Get Ahead of the Competition

AI for insurance brokers

What does the future hold for the insurance industry? With 2020 almost behind us, the world is looking ahead to new beginnings. According to Accenture’s Technology Vision for Insurance 2020 report, 81% of insurers acknowledge that technology has become an unavoidable part of the human experience. Yet, most agencies continue to hold onto the pen and paper business model. The role of a group health insurance broker is to evaluate coverage needs and negotiate the best terms and conditions. Imagine a world where technology immediately puts these answers at your fingertips to identify the risks clients face and match them to the best policy. In this week’s Broker Tool Belt, we focus on AI for insurance brokers, how to combine the power of human and machine, and how to gain an advantage over competitors that will last for years to come.

What does AI for insurance brokers mean?

Artificial intelligence refers to a branch of computer science focused on simulating human intelligence in machines to perform tasks that typically require a person. Specifically, machine learning is the application of artificial intelligence that empowers machines to learn from their environment and apply that learning to make better decisions.

Artificial intelligence has increased in popularity over the last decade, but its hype within the insurance industry continues to grow. Based on the previously mentioned Accenture research, 60% of insurance companies have begun making plans to use AI in their organizations. Moreover, 75% of insurance executives believe that AI will either significantly alter or completely transform the overall insurance industry in the next three years, and an additional 39% believe that AI will “significantly change” their company. While it might be hard today to envision a benefits world powered by AI, the truth is, AI for insurance brokers has many practical applications that could drive revolutionary change in the industry. Below, we share how brokers can enhance business insights with AI to provide better service to their clients.

1. Behavior-Based Insurance

Connecting individuals with options for affordable, high quality health care is one of the most important objectives for brokers. However, lifestyle decisions, habits, health conditions, and finances vary extremely from one person to another. How can a handful of health plans with set premiums help all consumers in the United States? Here is when AI for insurance brokers comes into play.

One of AI’s major applications for brokers is behavior-based insurance. On one hand, machine learning will allow you to collect more accurate data about each group, providing you with the resources to offer more personalized plans. Analyzing all this data enables insurers to glean a better picture of each client’s needs, which, in turn, could be used to more accurately determine the best policies.

On the other hand, AI can make it easier for consumers to sign up for the most appropriate policies. For example, today, consumers get a comparison based on financial cost (deductibles, coinsurance, copayments, and maximum out-of-pocket expenses) or based on dimensions such as the network of providers or the insurer’s reputation for processing claims. Instead, by applying machine learning, consumers could be able to get a recommendation based on their specific health needs and their current financial situation.

2. More Plan Options

In the same fashion, AI for insurance brokers could impact the number of plan options available to consumers. Historically, you’ve worked with employers to offer a small number of plan options to their employees. Typically, a high deductible plan with a lower premium to allow a young, single employee to save money as entry-level, and a lower deductible plan with a higher premium for employees who have any medical issues or employees with growing families.

The process to find the right plans for each group is time-consuming. Moreover, a high number of group health insurance brokers have fallen into the habit of passively renewing policies, instead of actively helping employers meet their needs year after year. With AI-driven technology, you could multiply the options offered without doubling your efforts. 

As highlighted previously, consumers could have access to customized policies based on their lifestyle and spending habits. AI could leverage the information collected and put it against all the plan options available to them. As a result, you’ll be able to reduce the time spent on plan research and consumers will have access to all the options that suit their needs. 

In addition, by connecting the AI technology with your benefits administration software, you’ll be able to deliver a unique digital experience, fulfilling all your clients’ needs at once. Provided that AI could automate, streamline, and simplify these more manual tasks within the insurance industry, brokers could focus on more complex responsibilities and the personal aspect of the business to boost engagement with their clients.

3. Better and Faster Customer Service

Customer service is another area where AI for insurance brokers can have a big impact. In particular, AI in the customer service field is making significant progress with chatbots: computer programs that simulate human conversations. You have probably noticed chatbots on different websites—they are situated on the bottom right corner of the page and they usually ask you if there is something they can help you with. If you’ve recently had to return a product or ask for a refund on Amazon, you’ve probably done it through their chatbot.

Chatbots are already being used in many industries to expand their customer service offerings, and the insurance industry is no different. This type of technology allows you to boost productivity by assisting customers 24/7 and “speaking” with more than one customer at the same time. By implementing chatbots, both employers and employees can get answers to common policy questions around the clock. This is a thoroughly pleasant experience as they will never have to wait for you to become available. If their problem is simple or common, the chatbot will be able to provide the solution. This frees you up to focus on more complex or time-consuming cases.

There is still a lot of work being done in this field. Despite advances in AI, accuracy can still be a problem, and a poorly designed chatbot can result in a poor customer experience. When looking into AI for insurance brokers, assess your business needs and research all your options. You can start by looking into Intercom, Drift, or Hubspot

Final Thoughts About AI for Insurance Brokers to Get Ahead of the Competition

While machines may never be able to provide the kind of advice you can, AI for insurance brokers can help you enhance your level of service and make your expertise even more impactful. In recent years, the amount of data available to brokers has increased dramatically. How are you planning on utilizing that data to empower your agency? By implementing AI and machine learning software, you can couple the data with AI to provide seamless and personalized service. This technology is not uniquely accessible to large brokers; small agencies can introduce AI one step at a time to enhance business insights. 2020 is almost behind us, and leading in the next years means combining the strength of AI and human to solve challenges, develop new products and services, and even break into or create new markets.