According to Grand View Research 2018 report, the global chatbot market is expected to reach $1.25 billion by 2025, with a CAGR of 24.3% (average annual growth rate).
The chatbot sector is expected to grow significantly over the forecast period since it will allow companies to cut operating costs by a sizeable amount, according to analysts. In addition, innovations in artificial intelligence and automatic learning technologies are likely to improve the features of chatbot, an important driver for the AI market in general.
– Chatbots are software solutions designed to simulate human conversation. Often chatbots are also called “intelligent agents” and there are a lot; some simply scan the input keywords in order to process a response with the most corresponding keywords (therefore working like search engines); others are able to simulate human behavior through advanced systems of recognition and analysis of natural language (NLP – Natural Language Processing).
Chatbots are the result of a kind of artificial intelligence where insurance carriers make the largest investments (see this report).
What are the benefits of a chatbot?
A key factor is of course the reduction in operating costs, particularly with regard to staff. Nevertheless, there are advantages deriving also from the greater speed and efficiency in the settlement of claims and from business development, thanks to a greater attention to the client and its experience in dealing with the Company, both during the sign-up phase (and even before) and the eventual settlement of claims. A Juniper Research survey we talked about here, clearly revealed how chatbots will replace real-life employees with artificial intelligence, increasingly refined, capable of learning from the same conversations and continuously reshaping with respect to the user. Therefore it ends up being more effective.
Many insurtech startups are already heading in this direction: the New York-based Lemonade, one of the most funded, said to have solved a claim in three seconds, via chatbot. Trov, on-demand policies to protect personal assets, also characterized by a chatbot for claim management, is among the most financed insurtech startups.
Cove, a startup from New Zealand, has based the entire process from purchase to claim on chatbot technology. Founders firmly believe that artificial intelligence can make insurance matters more human.
According to VentureBeat, three are the main benefits for customer experience.
Chatbots reduce customer bewilderment
Most of consumers agree that insurance companies use a blurred jargon. Trying to understand the differences between a death and life case insurance policy for example, can be very difficult if you are not familiar with the industry. A chatbot can help reduce potential confusion by putting complex terms into a simpler language and leading new customers through simple steps.
Chatbots are available 24/7
Unfortunately, the moment when something that requires an insurance claim occurs cannot be controlled by anyone. Road accidents, home damage and dangerous events can occur at any time day or night, and customers are often forced to call during business hours for assistance in filing a complaint. A chatbot can be available at any time. Furthermore, is not affected by the huge amount of calls, so customers must not wait for an hour or more.
Chatbots simplify boring processes
A chatbot can reduce unnecessary red tape and needless procedures in a claim settlement process that many clients currently hate. To some disgruntled insurance customers it may seem pure utopia, but actually many insurance chatbots are already doing just that. Insurtech startup Lemonade reports that as early as 2016 its chatbot Jim settled a claim in 3 seconds. It will have been a very simple case, of course, but the waiting time for the insurance and the overall process period will no doubt be greatly reduced thanks to the use of AI.
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