Insurance providers, such as AA Ireland, are transforming customer engagement and increasing sales conversion rates using chatbots and conversational AI, explains Cathal McGloin, CEO of ServisBOT (www.servisbot.com):
Writing in Insurance Times, Oliwia Berdak, principal analyst at Forrester, commented that, among all the technologies that insurers are exploring, “pragmatic AI has the biggest potential to deliver on insurers’ top business priorities in 2019, improving customer experience and generating revenue.”
Rules of engagement:
Within the sphere of ‘pragmatic AI’, conversational AI interfaces, such as chatbots, offer a whole new engagement model where customers can obtain a quote, file a claim, renew a policy, request information, and complete onboarding more conveniently and at a lower cost to the insurance provider.
Insurance companies can no longer expect people to engage nine-to-five. Consumers want to interact on their time and using their preferred channels, which may include voice assistants such as Amazon Alexa, or Google Home, messaging apps, SMS, web or mobile apps, as well as the more traditional email, live chat, and phone channels.
While price will always be an important factor when purchasing an insurance policy, the customer experience is key. Is the policy information easy to find, or is it hidden in the small print? How responsive is the insurance provider when customers make a claim? The more positive interactions they can provide, the more likely the insurer is to increase loyalty and retention.
Virtual assistants or chatbots that integrate securely with relevant business systems and third-party data, can provide more contextual and personalised engagement that enhances the customer experience. Deploying these task-oriented chatbots drives business results such as higher retention rates through renewals, increased conversation rates on policy quotes, and increased revenue through more effective onboarding.
Besides an insurance company making services more accessible and automated, chatbots also make it easier for insurers to understand the exact intent, or need, of the customer. Chatbots can work across different functions more seamlessly so that, for example, a Policy bot can work alongside a Quote bot to better inform customers on the difference between policies and which one best suits the customer’s circumstances. This leads to greater transparency and personalisation, positively impacting conversion and sales.
A friend in need
Since chatbots work 24/7, services are always available when a customer needs them.
A customer reporting an accident and filing a claim on the spot provides a perfect example of the benefits of having a chatbot constantly available to engage at the point of need and in the customer’s preferred channel. The customer may choose to interact via the insurance provider’s mobile app, SMS, or a messaging app, on their mobile device, while they’re stood on the roadside awaiting recovery of their vehicle. A claims bot can request image uploads of a driver’s license, registration plates, and photos of damage, on the spot, helping to shrink the claims filing and processing timeframe. This also reduces a lot of the friction that customers normally have to deal with in filing a claim.
ServisBOT works on the principle of deploying and co-ordinating an army of insurance bots that can do everything from generating a quote, on-boarding a new customer, renewing a policy, collecting payments, and many other use cases: bringing convenience and lower costs, while improving the customer experience.
Case study: Using Bots to Win Business
To combat rising digital advertising costs and reduce the incidence of missed webchats, AA Ireland investigated how to employ chatbots to improve conversion rates on incoming quotation requests that came in out of hours, or when call centre employees were busy on calls.
AA Ireland used our conversational AI platform to develop its own Quote Bot, within seven weeks the bot was trained and ready to use. Within twelve weeks AA Ireland Quote Bot had increased conversion rates on online quotes by 11 percent and reduced the number of missed webchats by 81 percent. Additionally, where customers had interacted with the Quote Bot to answer their initial queries online, they spent 40 percent less time on the phone with customer service employees.
AA Ireland reports that the Quote Bot is reaching people who haven’t previously contacted the insurer. Working in combination with the Quote Bot allows customer service specialists to focus on answering more complex queries and overcoming objections to win customers’ business.
AA Ireland Customer Lifecycle Manager, Louise McCormack comments, “Increasing conversion even by one to two percent helps to make the business more profitable. The potential to use AI-powered chatbots to improve our conversion rates, while providing operational efficiencies across customer service, was an opportunity we couldn’t ignore.”
Following the success of Quote Bot, AA Ireland has deployed a customer service bot and a travel quote assistance bot, with plans for additional bots.
Lloyds of London has drawn up its six-part transformation blueprint, with five of the areas involving building out a technology platform. The goal is to double the value of insurance business done, to increase the efficiency of processing policies and reduce the cost of sale of premiums which is currently 40p in every £1.
AI in all its forms is becoming integral to business systems, processes, and engagement models. For our part, we are making it easier for insurance providers to implement and launch conversational AI without needing a data scientist or solutions architect. We take away technical complexity so that insurance providers can focus on how they can apply AI to help them engage with customers more efficiently.
In 2020 as more pragmatic AI success stories emerge, we foresee other insurance companies moving beyond tactical deployments and adopting a chatbot strategy that is cross-functional across the whole business and customer life-cycle. This strategic approach will allow them to benefit from the genuine transformation that chatbots can bring.
IS PRIVATE PLACEMENT LIFE INSURANCE THE PERFECT PRODUCT FOR GLOBAL HNW FAMILIES
By Louis Zuckerbraun, Managing Director, GMG Insurance
Everyone wants to know that their family will be okay after they die and will do whatever they can to ensure that. That’s as true for high net-worth individuals (HNWIs) as it is for anyone else. But in an age where families are spread across the globe, leaving the kind of legacy you want can be incredibly complicated.
One product that could make things a great deal more simple is Private Placement Life Insurance (PPLI).
Originally conceived in the US, PPLI is rapidly gaining traction across Europe. Not only is it more efficient than traditional forms of life insurance, allowing the investments within the policy to hold many more types of assets and asset classes, it can also be a useful way to overcome specific issues such as management and control, beneficial ownership and substance.
While PPLI is gaining popularity across the globe, it’s still a relatively unknown product set, even among the HNWIs it would most benefit. It’s therefore worth looking at exactly what PPLI is.
Effectively an investment wrapped inside an insurance policy, a PPLI policy’s cash value depends on the performance of the investments within it. These investments can include hedge funds, mutual funds, and other potentially lucrative assets. Ultimately, it’s down to the policyholder to choose what kinds of investment they’d most like to have, meaning that they have a lot more freedom than they would with an ordinary life insurance policy.
Depending on the jurisdiction, a PPLI policy can also provide significant tax savings. In the US, for instance, the Internal Revenue Code treats insurance differently than it does investments. So, by packing an otherwise taxable investment in a tax- free policy, investors can reap big rewards on the investment, as well as the death benefit, tax-free.
But PPLI policies aren’t just beneficial from a tax perspective, they’re also useful for anyone with a global family.
A PPLI policy is generally by nature a globally focused vehicle. So, for instance, approved banking partners and advisors in Switzerland can work with US persons, to provide an investment vehicle that has a global focus.
The policy would purchase global funds and be managed by a global advisor who is outside the US but understands the US market. This makes it perfect for anyone who wants to diversify from traditional United States Dollar denominated investments but wants to maintain tax compliance and work with international advisors.
This solution works very well with a global family who may have, as an example, a child studying in London, or with international businesses, and who wish to build exposure globally in a tax efficient and US compliant manner. An international PPLI policy would be very beneficial to the family.
Further, the policy can be denominated in Swiss Francs, US Dollars or Euros depending on the needs and strategies of the policy owners or beneficiaries and still pay tax efficiently to the US persons.
These features also mean that a PPLI policy can be a useful replacement for, or supplement to, a family trust, especially if a tax authority is unlikely to accept the trustees as the legal owner of the assets held in the trust.
A clear choice
With more and more families living in different geographies, a PPLI policy is therefore an option that should be playing a much bigger role in the mainstream. It provides an accepted and compliant solution to the planning challenges faced by ultra-high net worth and high net worth families.
While life insurance, in general, provides a mechanism for estate tax planning, asset protection and investment flexibility that cannot be beaten by any other compliant tool, PPLI provides the flexibility and protection that informed high net worth families increasingly require.
If you’re looking a purchasing a PPLI policy, however, it must be managed by professional insurance and legal advisors who understand the product.
FINTECH IN AFRICA: WHY THIS MUSTN’T BE A DECADE OF WASTED POTENTIAL
Albert Maasland, Chief Executive Officer at Crown Agents Bank
The current COVID-19 pandemic is an unprecedented crisis of our times. As with many global disasters, emerging and frontier markets are likely to feel a devastating impact. The Institute of International Finance has already reported the largest capital outflow from emerging markets ever recorded. The extent of the effect is being debated, but efforts to reduce the impact must become an absolute priority.
One of the most important things we can do in the long term is remember how far these regions have come in the last few years and remind international players of their enormous potential. In 2019, technology startups that operate on the continent received a total of $1.3 billion in funding. Investors and financial services players alike have observed the considerable growth and adoption of fintech in Africa. Fintech is one sector that could show resilience during this crisis, as online services become essential and the use of cash is discouraged worldwide. Africa has seen its fintech industry develop and thrive of late and this must not be overlooked as we look to the future.
The fintech ‘hub’bub
According to the GSMA, Sub-Saharan Africa is still the “enduring epicenter of mobile money”. The region accounted for over 60% of the $690 billion that was transacted via mobile money in 2019 and has more than 150 million more registered accounts than the next highest region, South Asia.
The market conditions that make Sub-Saharan Africa so ripe for the adoption of mobile money range from the population being predominantly young and tech-savvy to an established history of not having sufficient financial infrastructure. Mobile wallets have brought better security and the ability to make international payments to the unbanked. Investors noticed.
Fintech became Africa’s best funded startup sector in 2019 as venture capital aimed to support and capitalise on the huge potential for growth. Visa, Worldpay and Mastercard are among those global financial players who have entered into collaborations with African fintech ventures, such as B2B payments company Flutterwave.
While Kenya saw the birth of M-Pesa, more countries are embracing fintech and becoming hubs on the continent. Nigeria saw the highest number of startup deals last year and startup investment grew nearly five fold compared to 2018.
E-commerce, financial products for SMEs and payments technology are among the areas receiving funding. As entrepreneurialism receives more support and international attention in Africa, the gaps in financial systems are being plugged.
Changing the definition
With all these developments and emerging services, traditional measurements of financial inclusion have needed to adapt. Financial inclusion metrics have previously been based on the number of adults with a bank account at a financial institution. According to the Global Findex from the World Bank, the share of adults with an account at a financial institution rose by 4 percentage points from 2014-2017, while those with a mobile money account nearly doubled—to 21%.
Mobile money accounts or mobile wallets are now a fundamental part of financial services in Africa. For investors and entrepreneurs, that translates to more information about the market, behavioural data about consumers and e-commerce possibilities. In essence, it amounts to opportunity.
These benefits also become apparent in international aid and charity work. It’s easier than ever for international development organisations to get funds directly to their aid workers and to individuals who need them safely. Remittances last year, which reached $550 billion, were three times that of official global aid volumes. 80% of these transactions were made to emerging markets, and the minutes and pennies saved in each transaction through the efficiency of mobile payments are invaluable to those most in need of these funds.
As financial inclusion makes great strides and financial technology has transformed the African startup landscape, we must not lose this progress. We must continue to value the benefits in bringing those excluded into the financial ecosystem and the unique opportunities presented in areas like Sub-Saharan Africa.
We’ve seen what real innovation looks like in the tangible changes fintech has had in Africa: doing things differently and creatively to improve the status quo. Investors should continue to watch and support these markets, and the financial services industry more widely should take heed of the lessons learned in the markets we too often believe to be behind us.
In the coming months, the importance of digital services and fintech in particular will become more palpable. Nigeria’s tech scene is already beginning to contribute to efforts to combat the COVID-19 pandemic. Africa was poised for an impressive decade and we must do what we can to remember and realise the potential of the world’s youngest population.
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