If your company handles insurance-related customer interactions, it’s time to consider Artificial Intelligence (AI). As industries go, the insurance sector is actually very advanced when it comes to AI adoption; in fact, a recent Microsoft report showed that nearly three-quarters (72%) of banks, insurance firms and other financial institutions are using such technologies.
While awareness and pilot implementations within the industry are definitely on the rise, there are still many executives that are still struggling to identify the best applications for their business. Indeed, almost 40% of all practitioners who have not yet invested in AI don’t know where AI can be used in their business, according to Deloitte.
To explore how AI can enable better customer interactions for insurers, we explore three key considerations for insurers that are thinking about implementing AI for customer services.
What service do I want to provide?
The first hurdle for any business when determining whether AI can improve customer interactions is deciding what level of service they want to provide. There are a number of different types of digital assistants on the market – and not all bots are made equal.
Insurers can easily find themselves comparing apples and pears when looking at AI solutions. So, it’s critical to start by looking at the different available solutions – from static chatbots, to cognitive AI agents – to consider the benefits of each solution and determine which can deliver the best experience to their customers.
Cognitive agents use advanced Natural Language Understanding (NLU) to navigate complex and foreign words and phrases to converse with customers. Unlike static chatbots, cognitive agents go beyond words to determine user intent. Once they determine a customer’s intent or intents, cognitive agents can handle multiple contexts within one conversation. This delivers a more complex, prolonged, and multi-stage conversations.
Cognitive agents can also be trained to gain a specialised understanding of a certain marketplace, and adapt to the role, so they can respond to customer questions across a wide variety of subject areas, including renters, property, marine, auto, and life insurance.
Chatbots don’t offer this level of sophistication. They operate from programmed scripts that allow them to complete basic tasks. If customers veer from this script or use language that is foreign to the chatbots, it will immediately escalate the transaction to a human colleague. This extends the interaction unnecessarily and creates a frustrating customer experience.
Finally, many customer engagements for insurers come at difficult moments in their lives. They may have just been burgled, a relative may have died, or they could have just had a car accident. It’s therefore important for any automated solution to recognise and react to the emotional state of the customer. Some cognitive AI agents also have emotional intelligence built in, allowing them to understand the customers’ tone and mood throughout the interaction. This enables it to display empathy and detects sentiment in order to reassure customers with appropriate phrases and comments when needed.
How can a cognitive agent help?
Every deployment of a cognitive agent is unique, so insurers need to think about the best way that a cognitive agent can help them and their employees. Here are just a few ways that cognitive agents can be deployed in an organisation:
Always-on customer care
Cognitive agents’ services can be delivered across multiple channels (web, phone, text, chat, etc.) 24/7/365, providing limitless support capacity. This ensures a customer never waits long for quality service even during spikes in customer call volume.
In fact, IPsoft’s Amelia’s transactional processing and scaling ability has enabled insurers to reduce their support costs by up to one-third and reinvest those savings back into the business. Because of her scalability, transaction and support resolution, times are drastically reduced. She can also reach accuracy levels in excess of 95% in managing certain conversations and policy transactions.
Cognitive agents are expert at gathering, verifying, and processing customer information. When customer facing, this enables them to have natural conversations with customers about insurance needs and personal habits in order to offer policy information and quotes.
With their deeper industry understanding and ability to engage in a real dialogue, Cognitive AI agents can make recommendations and execute transactions faster than humans with a personalised touch. This typically eliminates the need for a customer to visit an agent’s office or make a support call, as the cognitive agent can handle most frequent customer queries and transactions, such as incident registrations, policy recommendations, deductible and payment inquiries, rider recommendations, and a whole lot more.
The whisper agent
Cognitive agents’ ability to learn and improve over time helps them collaborate with human customer service colleagues, unlike static, low-level chatbots.
Non-licensed agents are not permitted to advise on or sell certain products and services. When those agents receive a call and need to service a customer, they can quickly interact with the cognitive agent behind the scenes and determine whether they can assist that customer. If they can, the cognitive agent uses its knowledge to coach the agent through the customer engagement; if not, the cognitive agent helps the human agent refer the customer to a colleague who can.
In the end, the customer receives correct information and an efficient service experience, the agent is confident that they’ve done the right thing, and the company knows their employees are complying with all proper and legal procedures.
With their advanced analytics, cognitive agents can also analyse a customer’s submitted information and help human agents determine whether the data is up-to-date and accurate. This then allows them to make recommendations on whether a policy should be issued, for what amount and at what premium level. As knowledge is accumulated over time, cognitive agents are well placed to recognise anomalies that may indicate fraud and report them to their human colleagues.
Does it really work?
There’s no question that cognitive agents hold all the promise for better customer interactions in insurance. But the million-dollar question is “does it really work?”.
One large insurer seeing the benefits of using cognitive agents to support their customer interactions is Allstate. The largest publicly held personal lines insurer in the US, Allstate first deployed cognitive AI agent, Amelia in September 2017. She has collaborated with Allstate live agents on more than three million calls. She leads agents through step-by-step procedures on a variety of support issues, including policy details and policyholder information.
Trained on almost 50 different insurance topics for Allstate, Amelia has lowered call duration from 4.6 to 4.2 minutes and 75% of customer inquiries have been solved during the first call, compared with 67% prior to Amelia’s hiring. In one month alone, Amelia assisted on almost 250,000 calls. Also, 99% of Allstate agents who worked with Amelia said they were completely satisfied with their interactions with her.
What are you waiting for?
Cognitive agents are a proven, enterprise-ready and scalable solution that are taking insurers’ customer interactions to the next level. Those insurers that have already invested are taking advantage of the competitive edge that it has given them against other companies that are hesitant about making investments in AI.
But given the current market trends and shifting consumer tastes, it won’t be long before customer expect and demand the always-on and superior service that cognitive agents provide both directly and behind the scenes. The hybrid workforce of human and digital agents is the future of customer engagements, so now is the time for insurers to investigate and invest in AI is now.
GOING GLOBAL: 7 TIPS TO GET STARTED
The idea of selling your products or services to new markets across the globe is an attractive prospect for any business, large or small. But while reaching new customers and unlocking the potential for further growth can seem exciting initially, adapting your business to foreign markets is no small feat. Factors such as cost, communication and cultural differences can all affect your business’ success when going global. This guide will explore some of the key considerations to make when you’re thinking of expanding your business overseas.
Evaluate Your Finances
One of the main questions to ask when looking to go global is whether or not your business can afford to do so. Crossing borders can be a complicated and expensive process which can take away time and resources from other opportunities at home. Growth for businesses abroad is often a slow process; establishing products and services in other countries takes time, so you will need to factor this into your planning. Thorough analysis of domestic and international markets should always be undertaken before making the decision to expand your business overseas.
Location, Location, Location
Choosing the right location is crucial to the success of your business expansion. International business network Going Global Live says that taking your business to the right countries initially can save you money on excessive marketing and advertising, putting you face-to-face with your target market from the outset. You should weigh up the pros and cons of potential locations, such as the likelihood of being able to fill your new HQ with prime, homegrown talent, as well as access to desired markets aided by foreign investment bodies. It is also important to consider the relevant laws and regulations laid out by national and regional governments.
Ensure You Have the Right Infrastructure
Making sure your business has the right infrastructure to handle expansion abroad will put you in a good place going forward. Implementing a clear management strategy, both locally and centrally, will set your business up for a smooth and successful launch overseas. Having up-to-date IT and communications systems at the centre of your business will allow you to share information and data securely. When it comes to shipping, choosing the best – and most efficient – transport and storage providers will give you the peace of mind that your products are safe in transit. Companies such as S Jones are ideal for businesses looking for more information on storage solutions for shipping overseas.
Build a Strong Team
Appointing a strong team to oversee your expansion is crucial to your company’s success in new markets. Hiring people with a good knowledge of your target market, as well as a focus on your business’ interests, is key when establishing your overseas HQ. Working with local partners can help you to communicate your business’ unique selling point in a meaningful way. Having an experienced partner or mentor that you can trust to oversee the expansion will allow you to stay focused on the bigger picture and ensure that your attention isn’t taken away from your core customer base.
Once you’ve made the move to globalise your business, be sure to have faith in your ideas and don’t be deterred by slow progress. Dr Shai Vyakarnam of the Cranfield School of Management says that while there is a fine balance between faith and stubbornness, you’ll need “incredible levels of self-belief and faith in your idea” to succeed, and that you “only need to be able to turn a few key people in your favour and the others will follow”. Making well-informed decisions quickly will allow you to stay on track and will nullify the threat of any lingering self-doubt. While progress may be slow at first, be sure to remain patient and be prepared to build personal relationships to gain the trust of your new partners and customer base.
Consider the Impact of New Ideas
When implementing new ideas for your business as whole, consider how they will be received by your new international customers, as well as by your existing customer base at home. What might be seen as a positive idea in your home country could be perceived as offensive or alienating by your customers abroad. Factors such as differing time zones, languages and cultural appropriateness should always be taken into consideration when making key decisions to eliminate the risk of alienating foreign customers and damaging your reputation overseas.
While it is important to have faith in your business and be patient initially, you should also be willing to make changes as things develop. Acting on the advice of experts is key to navigating new markets successfully. It may be that your products and services require innovation to meet demand, or that cultural differences lead you to make changes to your marketing strategy. Being adaptable will give you the best chance of meeting consumer demand on a global scale.
When trying to expand your business to an entirely new customer base, try to bear in mind some of the above points. As long as you remain patient and open-minded, then you should have little difficulty in marketing your business globally.
Homepage, S Jones Containers, https://www.sjonescontainers.co.uk/
‘7 Tips for optimizing international business communication’, 99designs, https://99designs.co.uk/blog/tips/tips-for-optimizing-international-business-communication/
‘Going Global: How To Expand Your Business Internationally’, Business News Daily, https://www.businessnewsdaily.com/8211-expand-business-internationally.html
‘Going Global Means Thinking Global: 8 Tips to Consider’, Cranfield School of Management, https://www.google.co.uk/amp/s/blog.som.cranfield.ac.uk/blog/going-global-means-thinking-global-tips%3fhs_amp=true
‘Our Top Tips for Going Global…’, Going Global Live, https://www.goinggloballive.co.uk/news/blog.asp?blog_id=21679
WHY HIGH NET WORTHS SHOULD BE LOOKING AT ANGEL INVESTING IN A NEGATIVE INTEREST RATE ENVIRONMENT
By Oliver Woolley, Envestors
As England gets through its second lockdown, Bank of England policymakers report the UK we may be headed for negative interest rates. This would be the for the first time this has happened in the bank’s 326-year history.
With interest rates already at 0.1%, central bank officials announced an additional £150bn stimulus package, in an attempt to boost consumer spending during the second wave of the pandemic.
Despite news of a vaccine, the BoE has taken the total stimulus to £895bn, as double-dip recession forecasts emerge.
In the event of negative interest rates becoming a reality, banks would have the incentive to lend more by making loans cheaper, but account holders would likely be asked to pay to hold money in a savings account.
While plans for negative interest rates are pending, government bonds are already selling at a negative yield of -0.003%, with investors hoping for the safe haven of government issued bonds paying out to get their money back in three years.
Between negative returns on savings accounts, lower yield on bond holdings, a volatile stock market and a projected dip in property prices, investors don’t have many options to diversify their portfolio in a negative rate interest environment.
However, for investors who are comfortable with risk, early-stage investing may be the answer. Angel investors support early-stage companies through financial backing, typically in exchange for equity in the company. An additional benefit for angel investors is the generous tax reliefs offered under the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS).
What is angel investing and why is it attractive?
An angel investor (also known as a private investor, seed investor or angel funder) supports early-stage enterprises by providing funding and getting actively involved in the business. Typically, the amount invested is between £5,000 and £50,000 per investment.
Early-stage investments are high risk as the number of early-stage businesses that grow through to an exit is low. Previous research suggested that 56% of investments in early-stage companies went bust. This is why experienced angels aim to build a diverse portfolio of 20+ investments.
While angels usually have to wait a number of years before recovering their initial investment, returns can be considerable. Due to the high risk nature of angel investing, high net worth individuals are usually looking for a 2.5x Return of Investment (RoI).
When first starting out, an investor should look for a well put together business plan with a defined exit strategy. Many angels choose to join an angel network when starting out, where investors can pool investment capital and invest alongside like-minded, experienced investors.
Tax relief through EIS and SEIS
In order to encourage investment in start-up companies which play a vital role in the economy, the UK government has launched several tax relief programmes, including the Enterprise Investment Scheme (EIS). This scheme, which makes investing in early stage enterprises tax-efficient, has encouraged £22bn in investment in 31,365 companies.
By investing in an EIS eligible company, angels receive income tax relief of 30% of the amount subscribed for eligible shares. Investors can put in up to £1m per tax year in EIS qualifying companies for the tax relief; this cap rises to £2m if investing in knowledge-intensive EIS companies.
In order to qualify, companies have to be trading for less than seven years and can raise a maximum of £12m.
Through EIS, angels receive a Capital Gains Tax (CGT) exemption, carry back and loss relief which can be offset against CGT or Income Tax.
Looking at a practical example:
If an angel invested £10,000 and the company failed, their actual loss would only be £7,000, due to the 30% income tax relief. However, a top rate income taxpayer paying tax at 45% will be able to claim loss relief on their tax liability at the 45% level. In this example, they’re eligible for further relief of £3,150, making their actual loss £3,850.
The success of EIS led to the introduction of the Seed Enterprise Investment Scheme (SEIS), promoting investments in riskier, earlier stage companies. About 80% of UK angel investors seek relief through EIS or its sister scheme, SEIS.
SEIS allows HNWIs to invest up to £100,000 and receive 50% tax relief on their investment. In order for companies to be eligible for SEIS, they have to have been trading for less than two years and cannot have more than £150,000 in previous investment.
Hot investment sectors
Reports from the British Business Bank and the UK Business Angels Association reveal that many investors are still seeing positive returns during the pandemic.
While angels are battling economic uncertainty, around three quarters are optimistic about the market bouncing back within the next 12 months.
Healthcare, Digital Health and MedTech, BioTech, Life Sciences and Pharmaceuticals are the leading sectors in terms of investor engagement during the COVID-19 crisis.
Software as a Service and FinTech have fared well throughout the pandemic and are still attracting a large number of investors.
Getting started with angel investing is now easier than ever, with an array of angel networks that can provide advice and support. Industry-association, the UKBAA, offers an Angel Investment Accelerator which is designed for those new to early-stage investing.
In order to choose the right angel network, HNWIs should look for the most active networks; Research body Beauhurst recently published a list of the most active networks in the UK.
Active networks will present a greater array of screened opportunities as well as connecting new investors to more experienced ones.
The best networks cover a variety of regions, sectors and investment sizes, and they’re forthcoming with examples of previous investments, so first-time angels can make the right choice on how to grow their portfolio.
So, while looming negative interest rates may require a rethink of current investment strategies for many – it might also open up a new and exciting investment class that offers much more than just financial gains.
ABOUT THE AUTHOR
Oliver Woolley is CEO and co-founder of Envestors. Envestors’ digital investment platform brings together entrepreneurs and investors across geographies, communities and sectors – creating the single marketplace for early stage investment in the UK.
Envestors partners with accelerators, incubators and angel networks to provide a white-label platform empowering them to promote deals, engage investors and connect to other networks.
Founded in 2004, Envestors has helped more than 200 high growth businesses raise more than £100m through its own private investment club.
Envestors is authorised and regulated by the Financial Conduct Authority.
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