The future of

customer service
in insurance
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 RACONTEUR.NET 3

Contents
04
CX factor: how the
06
Four ways in which AI is
customer experience transforming insurance
affects the bottom line

08
What are the insurance
11
How insurers can harness
industry’s digital the power of generative AI
transformation priorities?

13
Lifting the service ceiling:
above and beyond policies
and claims handling
4 THE FUTURE OF CUSTOMER SERVICE IN INSURANCE
CX factor: how the
customer experience
affects the bottom line
Even though customers are particularly price-
sensitive at present, insurers that remain
focused on service quality throughout their
relationship with policy-holders are more
likely to retain their business at renewal time
Ben Edwards
s the cost-of-living crisis continues
A to squeeze consumers and businesses
alike, many people are reviewing their
insurance policies to see if they might find a
better deal with a different provider. Against
this backdrop, it’s more important than ever for
insurers to focus on the customer experience
(CX) they provide to boost their renewal rates
and maintain profitability.
That’s the view of Fady Khayatt, partner at
management consultancy Oliver Wyman, who
says that, when you offer “a positive experience,
you see that people become less price-sensitive.
There’s a clear link between experience and
retention. Retaining customers and not need-
ing to reacquire them can have a big impact on
any insurer’s overall economics.”

If an insurance firm can engage effectively
with customers at their point of need, that
could also encourage them to buy more prod-
ucts from it, Khayatt adds.
Some insurers are seeking to grow their
business by creating more self-service chan-
nels enabling customers to manage their
policies or make claims in their own time.
Esure, for instance, has introduced an online
portal designed to give its policy-holders
maximum control.
“First of all, they’re not having to queue up to
speak to someone on the phone,” explains Ali-
son Edge, data product owner at Esure. “They
can input information at their leisure. This
means that, if they haven’t got the right details
to hand, they can come back to the portal later
and pick up where they left off.”
This is not something that customers can do
if they’re talking to an agent in a call centre.
Understanding the customer
Digitising the process also enables Esure to
gather more data throughout the customer
journey, helping it to gain actionable informa-
tion about policy-holders’ behaviour.
“We used to know whether someone had pur-
chased a policy or cancelled one, but now we
can see every step of a customer’s journey from
the moment they log in,” Edge says.
This can provide near-instant feedback on
steps where users are commonly abandon-
ing a given process, enabling the company to
tackle those problem areas and improve con-
version rates.
“We can see where along the journey they’re
likely to have dropped out, which gives us
some real insights into what the pain point
might be,” Edge says. “We’ll try to improve
the experience at that stage and then compare
performance to see whether our changes are
making a difference. We’re constantly refining
our journeys and trying to make them as pain-
free as possible.”
Technology is not about getting rid of
humans – we’re not going to just automate
everything and have our customers speak
to a robot
RACONTEUR.NET 5
Insurance companies must therefore ensure
that the CX they provide is of a consistently
high quality across the entire relationship,
from sales and onboarding through to claims
management and renewals.
Nelson Castellanos is chief partnerships
88%
officer at HDI Embedded, a provider of embed-
ded insurance in sectors including retail, travel
and events. He says that his firm is “really
focusing on delivering an excellent customer
of insurance CX experience across all the different touchpoints”.
professionals That is arguably even more important for
say that CX is a embedded insurance providers, Castellanos
growing strategic adds, because a poor CX can damage the repu-
priority at their tation of the brand that’s selling the cover. Mess
organisation that up and the insurer risks losing hard-won
partnership deals.
“Most embedded insurance solutions are
white-labelled, so you’re really playing with the
brand of your business partner or distribution
partner. The service you provide could really
affect their customer satisfaction scores,” he says.
91%
Digitising the claims processes
The efficiency with which claims are handled
is likely to have a big bearing on satisfaction
scores and retention rates. Because HDI Embed-
of insurance CX ded has digitised the entire claims procedure,
professionals they can be processed more quickly than a tra-
say that their ditional manual system would allow. Castella-
contact centre
nos says that his firm will often resolve a claim
is a meaningful
in three days – even sooner in some cases.
contributor to
While CX is an important factor when it
their CX strategy
comes to policy renewals, customers also
Talkdesk, 2022 want the best possible price, of course. Given
that risk determines price, insurers must seek
other ways to reduce costs, says Ed Halsey,
co-founder and COO of commercial insurance
broker Taveo.
One way they could do that is by cutting the
amount of staff time spent on administrative
tasks. By using technology to automate much
of that work, insurers and brokers can not only
reduce costs; they can also improve the CX,
because they should be able to devote more
time and resources to providing exemplary
customer service.
“Technology is not about getting rid of
humans – we’re not going to just automate
everything and have our customers speak to a
robot,” Halsey stresses. “This is about taking
all the low-value interactions away from our
people so that, whenever a customer calls, they
get straight through to a human being with the
expertise to help them.”
6 THE FUTURE OF CUSTOMER SERVICE IN INSURANCE
Four ways in which AI is
transforming insurance
Artificial intelligence has the potential to reshape
the sector by streamlining and even totally
automating key processes, while providing
insights that can help insurers to make more
accurate risk assessments
Ben Edwards
01
Improving risk modelling
Insurance companies often find it
difficult to price risk accurately. The
risk profiles that they create are limited by the data
they have on customers, which tends to be generic
(age segmentation, for instance). This means that
the premium a policy-holder pays won’t always
match the risk presented by that individual.
By using AI, insurers can potentially offer
more accurate pricing because the tech is able to
process more data points, notes Nelson Castella-
nos, chief partnerships officer at HDI Embedded.
“Why should you pay the same price for a
policy as someone else if your profile is less
risky than theirs? AI allows for more dynamic
pricing based on the actual risk,” he says.
The latest AI systems can do this by process-
ing vast quantities of unstructured data, as Ed
Halsey, co-founder and COO of Taveo, explains.
“There’s a lot of untapped data sitting in
filing cabinets on old paper documents or
pictures stored on someone’s hard drive, but
you don’t know what they’re showing unless
a human eye looks at it,” he says. “If you can
get all that information into an AI tool, it will
make underwriting so much more efficient.”

02
Streamlining claims
One way for insurers to guarantee
a poor customer experience is to
let the claims process drag on. AI can help to
solve this efficiency problem by automating
much of the work required. HDI Embedded,
for instance, uses AI to read documents such
as police reports in seconds, removing the
need for a human to read them – a potentially
onerous and time-consuming task.
Another way in which AI can accelerate
the claims process is by automating damage
assessments, says Simon Thompson, head of
data science at GFT Technologies, a digital
transformation consultancy.
He explains: “If you took some photos of
your vehicle that showed no damage when
you took out your policy and you then send in
pictures showing big dents and scratches, it’s
easy to have a machine that says: ‘Yes, signif-
icant damage is present in those images and
therefore there’s no debate that there was a
claims event,’”
This means that some claims can be pro-
cessed without any human intervention.
“The machine learning model will sometimes
come back and say that there’s no significant
damage,” Thompson says. “In such instances,
you would need a human to intervene and
manage any disputes arising, but the process
can be completely automated in most cases.”
03
Automating assistance
Advanced generative AI tools such
as ChatGPT can provide valuable
insights to employees and customers alike,
according to Fady Khayatt, partner at man-
agement consultancy Oliver Wyman.
“There’s an opportunity to use generative
AI as an aid to decision-making by treating
There’s an opportunity to use generative AI
as an aid to decision-making by treating it
as a co-pilot. It’s not removing the human
from the process; it’s providing the human
with additional information to support
better decisions
RACONTEUR.NET 7
it as a co-pilot. It’s not removing the human
from the process; it’s providing the human
with additional information to support better
decisions,” he stresses.
For instance, AI can provide recommendations
based on similar cases, with the claims handler
40%
or underwriter then validating that information.
Insurance firms such as Esure are also
using chatbots to make it easier for customers
to obtain answers to basic enquiries, poten-
of commercial tially resolving these more quickly and effi-
properties in the ciently than other methods would allow.
UK are currently If a question can’t be answered satisfacto-
underinsured rily by a chatbot, it will send a summary of
the text conversation to a member of staff,
Gallagher, 2022
says Alison Edge, data product owner at
Esure. This means that the customer won’t
have to repeat what they’ve typed and the
employee can comprehend the query faster
than they otherwise would.
“A chat history can often be extremely long,
so summarising it means that customers
won’t have to wait for the agent to read the
whole thing,” she says.
04
Reducing the number
of underinsured properties
As many as 40% of commercial
properties in the UK are underinsured, accord-
ing to research published by global insurance
broker Gallagher in Q4 2022. Thousands of
policy-holders could therefore find themselves
seriously out of pocket if they need to make a
claim.
“Many properties are insured at what the
rebuild cost was 30 years ago and we’ve just
applied index-linking every year,” Halsey
reports. “That’s not adequate – things change.”
AI can help to solve this problem by
improving the accuracy of building insur-
ance coverage, he says. It does so by combin-
ing geospatial data and satellite imagery with
AI-powered computer vision, giving a more
up-to-date view of a property’s dimensions
and risks.
Insurers can go further by using drones to
assess the risk profiles of commercial build-
ings, Halsey adds.
“You can send a drone around the top of a
property to assess the condition of its roof. Or,
better yet, you can get an agreement for it to
fly through a warehouse, say, see all the risk
features and tag these with computer vision,”
he says. “All of this sounds like it’s the year
3000, but it isn’t. You can do it now.”
 8 THE FUTURE OF CUSTOMER SERVICE IN INSURANCE

What are the insurance

industry’s digital
transformation priorities?
How much are customers driving digital transformation
and what are the investments priorities for insurers?

THERE IS AN APPETITE FOR THE DIGITISATION OF INSURANCE SERVICES. APPROXIMATELY A THIRD OF ALL
INSURANCE CUSTOMERS GLOBALLY WOULD BE OPEN TO MANAGING EVERYTHING ONLINE
Share of consumers who could imagine managing all their insurances exclusively online worldwide in 2022, by country

45% 33% 32% 30% 30% 30% 30% 29% 28% 27% 27% 26% 25% 25% 25% 25% 24% 24% 23% 15%
Finland

Brazil

UK

India

France

Sweden

Italy

US
Netherlands

Poland

South Africa

Germany

Switzerland

Australia

Spain

China

Austria

Canada

Mexico

SouthKorea

Statista, 2022
 RACONTEUR.NET 9

GIVEN THAT THE INSURANCE INDUSTRY HAS A TRUST AND PERCEPTION ISSUE, LISTENING TO WHAT
CUSTOMERS WANT AND IMPROVING EXPERIENCES NEEDS TO BE A PRIORITY
How Brits feels about the insurance industry as of July 2023... 7%
Don’t know

13% 36% 27% 15%

Somewhat Neither favourable Somewhat Very
favourable nor unfavourable unfavourable unfavourable

2%
Very favourable YouGov, 2023

AND THE STAKES ARE HIGH WHEN IT COMES TO THE IMPACT OF FRICTION IN THE CUSTOMER JOURNEY
Impact of CX friction on customers

59% 56% 53% 46%

Decreased Decreased Decreased Increased
likelihood to likelihood to likelihood to add likelihood of
renew their policy recommend to others additional policies fraudulent claims

Talkdesk, 2022

THERE IS A GENERAL SHIFT ACROSS INDUSTRIES TOWARDS CUSTOMER EXPERIENCE AND OPERATIONAL
EXCELLENCE BEING THE PRIMARY DRIVERS OF DIGITAL INVESTMENT RATHER THAN GROWTH
Objectives of digital investments over the past two years (% of respondents)

Top-line impact Bottom-line impact

Improve operational excellence

Improve customer / 14%
citizen experience
22% Increase employee
productivity
22%

Grow revenue
Increase
27%
cost-efficiency
25%

Introduce new Improve employee

products/services experience
45% 53%

Gartner, 2023
10 THE FUTURE OF CUSTOMER SERVICE IN INSURANCE

IN LINE WITH THIS, INSURANCE INDUSTRY TECH INVESTMENT PRIORITIES ARE SHIFTING TOWARDS THOSE WHICH
SUPPORT BETTER CUSTOMER EXPERIENCE AND DIGITAL CAPABILITIES
Changes in technology investments (% of insurance respondents) Respondents decreasing investment Respondents increasing investment

0% 20% 40% 60% 80%

Application modernisation

Cybersecurity/information security

Business intelligence/data analytics

Integration technologies/APIs/API architecture

Cloud platforms

Total experience solutions

Artificial intelligence/machine learning

Digital workplace

Hyperautomation

Legacy infrastructure and data centre technology

Business continuity management

Containerisation and orchestration of application workloads

Digital media

Product portfolio management tools

Connectivity

Internet of things

Enterprise resource planning

Digital twins

Human augmentation

Next-generation compute technology

None

0% 20% 40% 60% 80%

Gartner, 2023
 11
COMMERCIAL FEATURE

How insurers can harness

the power of generative AI
By adopting GenAI, insurance firms can become smarter and more
productive while pushing standards of customer service to new
heights. But achieving all this will require a change of mindset

Ben Edwards

he rapid advance of generative AI has
T the potential to reshape the insurance
industry from top to bottom. Largely
manual activities, ranging from risk pricing to
claims handling, could be enhanced or even
completely automated by firms adopting the lat-
est GenAI tools.
“These are the lowest-hanging fruit when it
comes to applying generative AI – and they’re
also the lowest-risk uses,” says Rahul Kumar,
vice-president and general manager of financial
services and insurance at Talkdesk. “You’re not
putting generative AI directly in front of your
customers and you have the opportunity to test,
learn and optimise by using the technology inter-
nally first.”
For instance, GenAI can help customer ser-
vice agents become more effective and efficient
by accelerating document searches and image
scans. It can give them real-time guidance while
they’re interacting with customers, Kumar
adds. It can even help new agents by generating
12
COMMERCIAL FEATURE
scripts to follow based on the conversations
they’re having.
While GenAI can enhance internal processes,
60%
it can also be used to take the customer experi-
ence in new directions. For instance, the technol-
ogy could dynamically adjust a customer’s cover-
age as their circumstances change.
“Imagine a scenario where you’re going on a
long car journey,” Kumar suggests. “You enter the
destination on your satnav and your insurance
co-pilot suggests increasing your cover, because
it can see that you’ll be travelling through terri-
74%
tories more prone to things going wrong. That’s a
new type of customer experience because it’s the
insurer proactively looking out for you.”
Despite the potential that GenAI offers insur-
ers, integrating it into their systems and pro-
cesses won’t be straightforward, partly because
of legacy technology problems, but also because
players in this sector generally aren’t quick to
embrace change.
“If you compare insurance with other sectors,
its technology adoption has traditionally been
a challenge because the industry is very risk-
averse,” Kumar says. “Insurers typically take
the fast-follower approach: we need 15 people to
tell us that something new is working for them
before we even consider talking about it.”
To embark on the process, insurers must
take numerous steps. First, a mindset shift is
required: insurance leaders need to become
more open to adopting new tech. Second, they
have to recognise that integrating AI is an iter-
ative process, so they shouldn’t be afraid of get-
ting things wrong as they test and learn.
“If you don’t incentivise people to fail, you’ll
never get them to try out new things,” Kumar
stresses. “This is about promoting an organ-
isational culture where it’s OK to say: ‘This
might not be perfect on day one, but we’ll get
there eventually.’”
Insurance firms must also ensure that humans
are heavily involved in any AI processes, par-
ticularly given the risks concerning so-called
hallucinations – where GenAI makes fictional
claims that it confidently passes off as facts.
“You need to put guardrails in place to ensure
that the technology doesn’t go rogue,” Kumar
warns. “Automation is great, but you must have
a human in the loop so that they can see what’s
going on and intervene if things aren’t proceed-
ing the way they should be.”
Humans also need to ensure that GenAI tools
are being trained on accurate information,
he adds, pointing out that “the insights that
of consumers consider online
communication as the primary
way of interacting with insurers in
the future
of consumers are open to receiving
AI-based insurance advice
Gyan Consulting, 2023
generative AI outputs will only be as good as
the data it has access to”.
As regulated entities, insurers have to be
cautious about potential compliance problems
concerning data protection, particularly when
they’re using third-party tech providers.
“Proper control mechanisms need to be in
place when it comes to who can access and ana-
lyse data,” Kumar says.
A final tip for ensuring a successful GenAI
deployment is not to try to implement
everything in one shot.
“You don’t have to go all in with a big bang,”
he says. “Conduct internal tests first with your
employees, picking a few processes where the
risk isn’t that severe but the possible efficiency
gains are significant.”
In other words, focus first on areas where
using GenAI can achieve cost savings and then
move to areas where it can generate value,
such as customer-facing processes. By taking
that approach, insurers can radically redesign
their businesses without causing unnecessary
disruption.
While a hasty implementation project will
undoubtedly cause problems, such is the
potential offered by GenAI that insurers must
still act quickly and decisively. Indeed, Kumar’s
prediction is that, “if things continue to go in
the direction they’re going, generative AI will
transform the industry to the point that it will
be almost unrecognisable by 2030”.
For more information please visit talkdesk.com

Lifting the service ceiling:
above and beyond policies
and claims handling
In an increasingly crowded and competitive
market, insurance providers must go the
extra mile to engage customers and provide
experiences that will result in lasting
relationships. Here’s how
RACONTEUR.NET 13
Ben Edwards
or many people, buying insurance is
F a simple matter: you purchase your
cover and hope that you’ll never need to
use it. That means most customers’ interactions
with insurers will be at the point of sale or when
something has gone wrong. The latter situation
is where an insurer can really differentiate its
customer experience (CX) by providing an empa-
thetic service that builds trust and loyalty among
policy-holders.
“Some insurers really focus on controlling the
claims process, so they take charge of the supply
chain more than others and don’t use so many
third-party providers when it comes to intervention
and repair, for instance,” says Fady Khayatt, partner
at management consultancy Oliver Wyman.
14 THE FUTURE OF CUSTOMER SERVICE IN INSURANCE
An insurer that can respond promptly to a cus-
tomer’s problem – a water leak in their property,
say – and resolve it quickly will potentially reduce
the damage caused and also strengthen the rela-
tionship by proving its attentiveness to the poli-
cy-holder in their moment of need.
“When a customer makes a claim, it’s during
a heightened emotional moment where a good
interaction has a much bigger impact than it
does at other points in the process,” Khayatt says.
“Players that control their supply chain closely
and use it to deliver good outcomes for customers
can help themselves in terms of lower claim costs,
but doing so also has a big positive impact on their
customer experiences and policy renewal rates.”
British insurance firm Esure is taking a simi-
lar approach by using AI to process car insurance
claims, automating the initial damage assessment
and then recommending local repair services for
policy-holders to choose from.
“That helps our customers get through the claims
journey so much faster,” says Alison Edge, data
product owner at Esure. “It saves cost for us, because
the settlement time is reduced and the vehicle can
get to the garage for repair more quickly.”
Personalised insurance offerings
Insurers can also use AI and advanced data ana-
lytics to hyper-personalise their CX so that all
product recommendations made to a prospective
customer are relevant and based on that person’s
specific needs. For instance, when it comes to
covering small firms, providers that can make
their offerings more relatable to a particular cus-
tomer’s business are likely to be more successful.
“When a small business owner feels that the
conversation and the policy are clearly tailored
to their requirements, you’ll typically see a clear
uplift in conversions, as opposed to when they’re
interacting with an insurer that’s offering prod-
ucts that sound a bit generic and could apply to
any company,” Khayatt says.
Another way by which insurers can elevate
their CX is to make buying cover more seamless
When a small business owner feels that
the conversation and the policy are clearly
tailored to their requirements, you’ll
typically see a clear uplift in conversions
and convenient by partnering with businesses
and offering embedded insurance products
when a customer makes a related purchase. For
instance, they could offer a travel policy to a cus-
tomer who’s just booked a holiday.
“For fintech firms and marketplaces, embed-
ded insurance also increases engagement and the
‘stickiness’ of their platforms,” says Nelson Castel-
lanos, head of partnerships at embedded insurance
specialist HDI Embedded. “That’s because the more
products and services they can offer, the more likely
their customers are going to stay in their ecosystem.”
Castellanos reports that his firm sees conver-
sion rates increase by 15% to 20% when partners
offer insurance products that are embedded at
the point of sale.
Streamlining customer interactions
Insurers should be considering ways to minimise
the friction that customers encounter when dealing
with them, according to Simon Thompson, head of
data science at digital transformation consultancy
GFT Technologies.
That will not only help improve the CX a firm
provides; it will also give the insurer greater rev-
enue-earning potential, because customers are
more likely to choose a provider that offers the most
streamlined processes, he argues.
Technological advances are also creating more
potential for insurers to completely redesign their
offerings by thinking differently about custom-
ers’ likely future needs and how their products
can be packaged.
“For example, you could have an integrated home
insurance and assistance product with a chatbot
and online expertise for solving problems around
the home bundled with insurance, or a tool that
would help bundle the right sorts of cover for a
small business,” Khayatt suggests. “So you have a
real modular insurance product, with AI helping
to identify the right combination of products and
services to offer.”
This is a pivotal period for the industry – a time
in which any insurers that are slow to embrace
tech to elevate their CX are sure to get left behind.
That’s the view of Ed Halsey, co-founder and COO
of insurance broker Taveo.
“There’s an impending explosion of AI and auto-
mation,” he says. “The brokers and insurers that
can’t work out how to integrate this technology
and are still operating on legacy systems simply
won’t be able to match the service levels being pro-
vided elsewhere by players that have built mod-
ern, innovative tech stacks with the customer at
their centre.”
Publication sponsored by