After the COVID interruption, worldwide insurtech funding efforts bounced back in Q2 reaching over $1.5 billion as the market looks for more efficient use cases, while new market leaders like Lemonade continue to show the old guard how things should be done.
When Lemonade launched in the US during 2015, it started a trend or shockwave that continues to be felt across the insurance market. Using apps and chatbots to deliver insurance created a lightweight firm that is hitting way above its weight, with some 320 employees and a $3.8 billion market valuation in July after its IPO.
Since that launch and the growing number of other insurance disruptors, the already tech-savvy insurance market has doubled down on insurtech research and development, and investment in startups delivering new features and services. Check out CBIInsight’s latest report (sign-up required) for the latest market data.
Such is the level of activity in the insurance sector, from personal, property, vehicles, travel and industrial, it can afford a top 100 ranking of the most valuable or interesting businesses, with many offering bot or AI tech. With the industry on its third or fourth generation of bots, the current drive is to improve the customer experience, as noted by this report, “As far as the insurance industry is concerned, chatbots are an innovative tool that can offer many benefits, such as around-the-clock support for consumers and as an educational tool for consumers looking to learn more about their policy and more.”
Changes in Insurance and Customer Perception
As the insurance industry looks to offer more flexible products to consumers and business, they are trying to present their market as one in tune with the times. Appealing to younger consumers and business leaders with apps, dashboards, bots and services that add flexibility to what are viewed as dull and boring products are major goals while refining internal resources.
Most insurers can build or create viable bots using a chatbot platform, take VisitorsCoverage whose AI chatbot Luna launched in March. She helps respond to customer queries and helps travelers navigate through the complicated world of travel insurance. Luna uses AI and machine learning capabilities to adapt and grow with each interaction to make it smarter and improve the accuracy and relevance of responses.
But updating the wider package is essential, with apps showing dashboards counting down the level or expiry date of cover, comparing markets, providing the best quote and so on. Look at the insurance apps on a mobile app store and there are plenty still leaving people struggling to read the small print while others have bold graphs and charts focusing on what the customer needs to know.
Note, most of the firms covered here are U.S-based, generating the big headlines, but insurance is a global industry with huge sums poured into local markets to gain competitive advantage and brand awareness. In a consumer landscape where bots and apps dominate, every insurer will be looking to ensure its digital presence is of the highest order, helping deliver a premium-brand and consumer experience.
Take the apps can accept and send photos and recorded testimony of damage instantly as part of insurance claims, or the bots that have an ability to remember previous customer chats and keep up with the latest information on an application and claim in a seamless process, all adding to that customer value.
Many businesses will have seen the rush of queries during COVID and realised the benefits of bots can be better used beyond the basic levels that many insurers offer. However, as a regulated industry, chatbot builders will have to ensure that any AI is suitably governed and avoids falling into the black hole approach that some developers prefer.
And while people might have multiple insurers they will soon be looking apps that keep all their different insurances together, and remind them of renewal dates and offer the best rates. Insurers will need to play a part in this joined-up economy or face being side-lined by better-looking competitors or aggregators.
Whatever the change, insurance is in a constant race to keep up with consumer expectations, and better bots, apps and services will play a key part in delivering what is needed in the marketplace. All of which helps go beyond the usual use of bots to cut down on customer support hours, reduce call center costs, and so on.