Before we explore how to easily implement AI for insurance agencies, let’s dive into some of the concepts and terminology.
Many people think of artificial intelligence as either ChatGPT or SkyNet (thanks to the Arnold fans out there). While only the former is a real thing in today’s world, it is not the only technology that falls under the “AI” umbrella.
AI-powered chatbots like ChatGPT or Google Bard are the most discussed applications of AI recently. They can be extremely powerful and applied relatively easily. You can increase their usefulness by connecting specific plugins, which are essentially connections for other applications or capabilities.
Chatbots are based on what is known as large language models, which are basically massive databases of various data points (I am talking about billions of data points) that you can use for a variety of applications. You can even take these databases and “train” your own LLM model to analyze data that you are particularly interested in.
Then there are the other direct applications that are being built on top of these large language models. ChatGPT is an example, but we are seeing AI built into almost every application that we use.
Which begs two questions: Why are agencies adopting this technology? And how can AI be used for insurance agencies going forward?
Why Implement AI for Insurance Agencies
As your agency faces evolving customer expectations, complex risk assessments and the need for operational efficiency, implementing AI solutions can unlock a multitude of advantages.
AI Saves You Time
Everyone knows you need to run efficiency to operate effectively. But I still see agencies spending countless hours typing up repetitive emails, policy language and marketing materials. Understanding how to prompt chatbots correctly can streamline the process for your agents and service teams.
Think about the number of times you get a call from a client inquiring about adding a new vehicle to their policy. What does your process typically look like? The agent takes the phone call and types up an email or adds a task for a service team member. The service team member looks up the VIN, reaches out to the carrier, collects the new policy information, then sends that information to the client. Then you might need to get documents back, send them back over to the carrier, send confirmations or final policy documents… the list goes on.
Now think about how much money you can save if all the agent had to do was click a button, select the client and the process moved on its own. All the emails typed up in advance, all the correspondents ready to be deployed. Your service team could manage a significantly higher client load without sacrificing client experience.
Enhanced Client Experience
I write a lot about building trust with your clients and the overall client experience. Artificial intelligence can help you build an exceptional experience by offering personalized recommendations, tailored policies and streamlined claims processing.
Chatbots powered enable instant customer support, answering inquiries promptly and efficiently. AI algorithms can analyze vast amounts of customer data, enabling agencies to understand customer needs better and anticipate future requirements, resulting in more customized products and services.
You often see these on websites. A client hits the website, a chatbot pops up asking what they need help with, and prompts them along, providing answers along the way or connecting them with an agent or service team member.
Accurate Risk Assessment
Accurately assessing risk is the foundation of the insurance industry for both agencies and brokers. AI can analyze vast datasets, including historical claims, customer behavior, and external factors, to identify patterns and predict risks more accurately. By leveraging machine learning models, insurers can make informed decisions when underwriting policies, pricing premiums, and managing risks, leading to fairer pricing and reduced fraud.
You can build out some of this on your own, but finding a technology solution that benchmarks risk up front will allow you to save time and tap into a proven system. LAUNCH is built around accurately assessing risk among all the impact areas your clients face. See how it could work for your firm in a quick, on-demand demo.
Efficient Claims Processing
Traditionally, claims processing has been a time-consuming and labor-intensive task for insurance agencies. With AI, claims management can be significantly streamlined. Intelligent automation can analyze and extract relevant information from documents, reducing manual data entry and minimizing errors. AI-powered image recognition technology enables quick damage assessment through uploaded photos, accelerating the claims settlement process. Moreover, machine learning algorithms can detect fraud indicators, preventing fraudulent claims and protecting insurance agencies from financial losses.
Keep in mind that AI isn’t at a point where it’s going to replace your service team. But it will create opportunities for your service team to be more efficient, collect information more accurately, and allow for prompt client communication.
AI also empowers insurance agencies with data-driven insights, enabling you to make well-informed business decisions.
By analyzing vast amounts of structured and unstructured data, AI algorithms can identify emerging market trends, customer preferences, and risks. These insights help agencies develop innovative insurance products, tailor marketing strategies, and enhance risk management practices.
Y can gain a competitive edge in a dynamic market by leveraging AI. We have seen this done at the carrier level for years, and as more and more independent agencies catch up, we can better target our ideal clients and understand where our own firms are at risk.
It’s not hard to see the why behind AI – increased efficiency means lower labor costs per client and a better client experience. But putting AI into practice for insurance agencies is daunting.
Here are some ways we’ve implemented AI, and ways we’re helping independent insurance agencies adopt the technology.
Implementing AI for Insurance Agencies
The easiest and quickest AI for insurance agencies to implement are chatbots like ChatGPT and Google Bard. These are the easiest to interact with, understand and use right out of the box. You can certainly build upon this guide with other applications of AI, but these are the areas that I feel are easiest to implement at your agency today – yes, today.
AI for Insurance in Sales & Marketing
Sales and marketing seem like obvious areas to use AI, but you may be surprised at the usefulness. AI powered chatbots can help a new producer get up to speed faster than ever before and give seasoned producers a tool that will level up their game significantly.
One of the first areas I had ChatGPT help me with was building a niche or target market to specialize in. Using the tool, I explored building a niche in multi-location restaurants. ChatGPT helped me understand the pain points and risk factors that these businesses have, how I could help them solve those pain points, and build custom plans or timelines of service to implement with those clients.
Once I had my “product” for multi-location restaurants built, ChatGPT built me an entire email marketing campaign to reach out to those prospects. Not only did it write the email sequence for me, but it also wrote replies to potential client responses. This allows you to run A/B split testing to determine which verbiage will drive the best results.
What happens if I want to cold call these prospects? ChatGPT has you covered. It can draft you a few different cold call scripts so that you can test which one is most effective. While I think that is valuable, the magic here is in the objection handling. If you have ever made cold calls, you know that you will have to overcome some objections. ChatGPT can anticipate the top objections you will get and provide scripts for you to overcome those objections. Again, it is really adept at this type of work and the results were fantastic!
Marketing Client Insurance Programs
One of the biggest roles we serve for our clients is in the marketing of their insurance programs to get the best coverage at the best price. Our clients typically don’t have direct access to carriers when they are marketing their business. They rely on an insurance agent to market their insurance program for them. How are you creating a top-of-stack submission that will get their business the best coverage at the best price?
AI can help. This is a massive opportunity to implement AI for insurance agencies. The first thing an underwriter is going to look at in an insurance submission is the narrative. A good narrative should explain what the business is, the leadership of the business, the risk management practices the business engages in and why this business is best in class. This is not an easy task.
ChatGPT helps me write narratives to these carriers. I can give it some of the specifics about a particular client and tell it that my goal is to get my client the best coverage at the best price, and that I need a narrative that will tell this client’s story effectively. After a little back and forth, I can have a best practices level narrative to send along with my submission. This can provide massive dividends to your client’s insurance program.
What about negotiating with a carrier for better rates or better coverage? Why not have ChatGPT help? This is a great use case. Outline some of the details about your client and that you want to negotiate with the underwriter to get better rates. AI can provide you with the best arguments you could use to give you the best shot at getting better rates.
Much like it can help handle objections in sales, ChatGPT can help you anticipate and draft responses to the underwriter’s objections. This gives you the best opportunity to secure the most favorable rate for your clients.
As advisors to our clients, we often find ourselves recommending different coverage options, different carriers or even different insurance programs as a whole. Have you ever felt as if you aren’t sure how to best explain why a client should consider a particular coverage?
Well, chatbots are a great way to brainstorm and explore various ways to help the client understand the importance of a particular recommendation.
First, we can use ChatGPT to explore why a client may need to consider this coverage. What scenarios could they experience that this coverage would respond to? What would happen in those scenarios if they didn’t have the coverage in place? These are great questions to ask ChatGPT. Have it provide three to five scenarios for each coverage and explain the risks associated with self-insuring those impact areas.
Next, have ChatGPT tell you how you can help the client understand that they need to purchase this coverage as part of their insurance program. What might their objections be and how could you overcome those objections?
Sometimes you may not be sure what a particular coverage is and want to use a ChatBot to learn more. This is a slippery slope. ChatBots can be great at helping you do research into insurance coverages, but you want to make sure you are getting accurate information. When doing research using a ChatBot, you must understand that the AI thinks it is correct regardless of the actual accuracy of the information.
If you are going to use a ChatBot for research, I recommend having it search for and pull from resources and articles online and then cite those specific articles or resources for you. Then you can go and read those for yourself. You can also have the ChatBot summarize a particular blog post or PDF document that is on the web. This is a great way to expedite that learning process. Definitely do your own research into the best ways to use ChatBots for research before trying this one out.
The Bottom Line
Implementing AI for insurance agencies isn’t as difficult as it seems. You don’t need to run out and hire a developer today. Start small – use ChatGPT to write a blog, draft an email or do some sales training by analyzing common objections.
Over time, you’ll find where it’s creating efficiencies for you and your team. Then, you can explore how to further integrate those into your processes, whether you find a technology that is already offering these features, or you pay a development team to build it for you.
Remember, AI for insurance agencies is about saving you time and improving the client experience. Whenever you find yourself doing a repetitive task or writing a message over and over, turn to a chatbot and see how it can help.