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Chatbots in insurance – Benefits & use cases

Published: April 26, 2022
Updated: September 16, 2023
Chatbots in insurance – Benefits & use cases

With the world becoming more digital, legacy systems in the insurance industry are transforming. Customers now have quick access to information and are no longer left out of the loop.

Digitalization has demystified insurance processes for customers. Today, they can shop for policies online, read reviews, compare offerings of different insurance providers, and even self-service their policies. 

Moreover, with rising competition in the insurance industry, customers have far too many options to choose from. So, if a provider fails to meet their expectations, they will quickly shift to a competitor. They expect seamless, on-demand services and a more personalized experience. It would be difficult to imagine having these expectations met with old, complex processes. To bridge this gap, insurers and insurtechs around the world are investing in AI-powered insurance chatbots to enhance customer experience.

In this article today, we’ll have a look at how chatbots are making a difference in the insurance industry and what the future holds for them.

Global rise of chatbot popularity 

The rise of messaging apps has made chat the preferred mode of communication online. Customers expect to be able to communicate with brands over chat for instant resolution of queries. 

On the other hand, the pandemic has accelerated the shift towards a digital world. Businesses around the globe are experiencing record-high engagement from customers. It can get overwhelming for human agents to keep up and provide efficient customer service without the involvement of conversational AI.

Gartner predicts that by 2022, 70% of customer interactions will involve emerging technologies such as machine learning (ML) applications, chatbots, and mobile messaging, up from 15% in 2018.

What is an insurance chatbot?

An insurance chatbot is essentially your digital front desk, claims agent, and customer service rep rolled into one—but with a modern twist. Built on advanced AI and natural language processing technologies, these chatbots go beyond basic scripted answers. They’re designed to understand human language, answer queries, assist in selecting the right insurance plans, and even help with filing claims—all in real-time.

Think Siri or Alexa, but specialized for the insurance world. Imagine just texting or voice-commanding your insurance “needs and deeds” at any time of the day. No hold music, no paperwork, just efficient and personalized service. It’s not a far-off future; it’s happening now.

Statistics show that 44% of customers find it comfortable to use chatbots for insurance claims, and 43% prefer them for insurance applications.

Benefits of insurance chatbots

Insurance chatbots are game changers, and we’re not just saying that. They are setting new standards in customer service and operational efficiency, adding value to both the customer and the company. Check out what makes them such an asset:

1. Always on, always ready

Traditional call centers got hours, but your insurance chatbot doesn’t need a break. Whether it’s a query or a claim, your virtual assistant is ready to jump in 24/7. Furthermore, chatbots are essential in helping customers compare plans and find the best coverage. Even though this process can be complex, chatbots make it simpler by asking the right questions and giving personalized suggestions, making decisions easier.

2. Save the bucks

Why send customers to an expensive call center when a bot can handle it? The money saved can go a long way, especially when the economic winds aren’t favorable. This also allows customer service agents to focus on more complex queries, further streamlining operational efficiency.

3. Consistent information

We get it, humans make mistakes. But your chatbot won’t — it’s designed to information from integrated databases, ensuring accurate and consistent information, every single time.

4. Scale it up

Worried about meeting customer needs during peak hours? Your chatbot has got it covered. Deploy it wherever you want—website, mobile app, or social channels—it can handle the heat.

5. No more form fatigue

Data collection becomes a breeze with insurance bots. They excel in gathering customer data for tasks like generating quotes or processing applications. They can even request and verify supporting documents, offering a streamlined data collection process that benefits both the customer and the provider.

6. Uncomplicate the complicated

Insurance procedures often involve extensive paperwork and can be confusing for the average person. Your chatbot can works as a friendly guide, helping customers with clear answers on policies, claims, and terms and conditions.

7. Make it personal

Your chatbot knows the customer. It remembers past claims, preferred coverages, and even special dates. Using this data, it can give tips and reminders that are actually useful. Additionally, these bots are really good at understanding how customers act and what they like. This helps them figure out when to suggest extra coverage. For example, if a customer gets a new car, the insurance chatbot might suggest getting more coverage for that car.

8. Learn as you go

Training sessions can often be boring, for both new and experienced professionals. How about learning from a chatbot instead? These bots can explain things, give quizzes, and show different situations to help trainees learn better. Trainees can also talk to these bots to learn about different types of insurance, how policies work, and the steps for relevant topics.

7 Use cases of insurance chatbots

Insurance chatbots are far more than digital assistants—they’re strategic assets with a range of functionalities that address specific needs in the insurance industry. Here are some of the compelling use cases where insurance chatbots truly shine:

1. Tailored insurance plans through intelligent chatbot questioning

Imagine needing a health insurance policy. Your chatbot would initiate a conversation to gather relevant information—age, medical history, preferred coverage—and then offer you tailored options. It’s like having a personal insurance advisor, only faster.

2. Demystifying insurance jargon with chatbot assistance

We all know that insurance terminology can feel like a foreign language. Enter your chatbot, which breaks down complex terms such as ‘deductibles,’ ‘premiums,’ or ‘coverage limits’ into easy-to-understand language, empowering customers to make informed choices.

3. Accelerated chatbot-driven claims processing

The claims process usually involves a mountain of paperwork and a long waiting period. Insurance chatbots are designed to expedite this by walking customers through each step, collecting essential information and documents, and routing these to the appropriate departments. It’s hassle-free and efficient.

4. Instant access to policy details via chatbot

No need to sift through piles of paperwork or hold on a call for what seems like an eternity. Your chatbot can pull up policy details, renewal dates, and cost breakdowns within seconds, increasing customer satisfaction.

5. Streamlined customer qualification using chatbot technology

Your chatbot can serve as the first point of contact for website visitors, asking preliminary questions to gauge eligibility for specific insurance policies. This not only increases application rates but also ensures that customers find the policies most suited to their needs.

6. Seamless chatbot payment management

Navigating the payment landscape can be tricky. Your chatbot offers a helping hand, guiding customers through payment options, reminding them of deadlines, and even assisting with transaction completions. The result? Fewer missed payments and policy lapses.

7. Real-time customer feedback through chatbot interactions.

Want to know what your customers really think about your services? Your chatbot can solicit feedback on a variety of areas—be it the claims process, policy clarity, or customer service quality. It’s a valuable source of insights for continuous improvement.

By addressing these varied needs, insurance chatbots are not just enhancing customer experiences but also contributing to a more efficient and responsive insurance ecosystem.

How are leading insurance companies using chatbots?

Chatbots in the insurance sector are more than just another tech gimmick; they’re a game-changer. They tackle a host of functions, making both the insurer’s and the insured’s life easier and more efficient. Let’s break down how they’re changing the game:

1. Automating customer service with chatbots

When you first reach out to an insurance company, you usually have a lot of questions. That’s where customer service comes in. But with a chatbot, many of your questions can get answered right away. This lets customer service agents focus on solving more complicated issues where their expertise is really needed.

2. Chatbot-driven lead generation and conversion

Who doesn’t want more customers, right? Chatbots help gather valuable info from potential customers, doing the groundwork for the sales team. They can even score these leads, ensuring that the sales team focuses only on leads that are more likely to convert. This way, your marketing team can put more energy into crafting highly targeted campaigns.

3. Claims processing using chatbots

Claim settlement is usually a long, drawn-out affair, full of paperwork and endless back-and-forths. Chatbots, however, make this entire process a breeze. Just tell the bot what your claim is about, provide a few more details, and you’re set. The bot pulls up your policy info and sets the ball rolling on your claim right away.

4. Personalized marketing through chatbots

In today’s competitive insurance landscape, you’ve got to stand out. Chatbots help do just that by offering a personal touch. They use data from your past interactions to offer you products or plans tailored to your needs. This boosts your chances of actually buying a policy that suits you best.

5. Chatbot-based policy management

Gone are the days when you had to dig through piles of papers to find your insurance details. With a chatbot, managing your policy is as easy as chatting with a friend. Whether you’re initiating a new claim or simply checking the status of an existing one, the chatbot is there to guide you step-by-step.

6. Cutting operational costs with chatbots

Keeping operational costs low is crucial for any business, and insurance companies are no different. Chatbots help by taking on the tasks that would usually eat up a lot of a human agent’s time, reducing the need for a large staff and therefore cutting costs.

7. Data analytics powered by chatbots

Remember, these bots are always learning. They collect data during your interactions, helping the company understand customer behavior and preferences better. This leads to more personalized services and can even guide the creation of new insurance products.

So there you have it—chatbots are transforming the insurance industry from the inside out. From customer service to lead generation, claims processing, and even data analytics, they’re making everything quicker, easier, and more efficient.

Why use Yellow.ai chatbots for your insurance business?

Yellow.ai is a leading conversational AI provider that specializes in developing chatbots specifically for insurance giants world over. Powered by generative AI, Yellow.ai’s Dynamic Automation Platform (DAP) offers a range of benefits through next-gen voice and chatbots, including:

Multilingual support: That can help users verify policy details, check policy due date, manage payments, update customer information, set premium due date reminders.

Smooth integrations – Into your existing systems to offer seamless and personalized experience to users. No more hopping from one application to another for resolutions, or switching devices for additional features .

Context-based intent resolutions – Leveraging powerful NLP and machine learning algorithms, these bots are able to understand queries better and provide deeper insights from customer interaction to help constantly improve bot performance and understand consumer behavior.


Chatbots in the insurance sector are a win-win for both companies and customers. They automate tedious tasks, provide 24/7 customer service, and offer personalized solutions, making life easier for everyone involved. The use cases range from helping customers pick the right insurance plan, to guiding them through the claims process, and even collecting vital feedback to improve services.

On the business side, chatbots can handle initial customer queries, generate and qualify leads, manage claims, and even assist in personalized marketing efforts. They provide invaluable data analytics while substantially reducing operational costs. The utility of chatbots is growing, and it’s about time insurance companies harness this technology to its full potential.

For customers, the benefits are clear: faster service, better personalization, and less hassle in managing their insurance needs. For insurers, it’s about being more efficient and effective in serving those customers. So if you’re in the insurance business, you might want to ask yourself: isn’t it time to get on board with chatbots?

Insurance chatbot – FAQs

How secure are chatbots in handling sensitive insurance data?

Chatbots in insurance employ advanced security protocols to ensure the protection of sensitive data. They use encryption to safeguard customer information during interactions. Chatbots can also mask certain sensitive information, such as credit card numbers or bank account details, by displaying only partial information. This limits exposure and minimizes risk.

Can insurance chatbots help with claim management?

Yes, insurance chatbots are designed to assist with claim management. They can guide customers through the claim reporting process, collect necessary information, and provide updates on claim status.

For eg, a customer can initiate a conversation with the chatbot to report an accident. The chatbot asks for details such as date, location, and a description of the incident. It then generates a claim report for the insurer.

Can I integrate an insurance chatbot with other systems?

Insurance chatbots are built to integrate with various systems and platforms. This allows them to access customer information, policy data, and other relevant data sources. 

Every time a customer interacts with the chatbot, it can retrieve the customer’s policy details and claims history in real time.

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