This AI tool is a ‘huge priority’ for some insurers

Chatbots are getting better at answering questions, and many Canadian insurers are taking a serious look at the technology, a fintech analyst said Tuesday.

“Quite a few of the major insurers in North America are looking to chatbots as a way to enhance what they do,” Nick Maynard, a senior analyst for Juniper Research Ltd., said in an interview.

One Ontario firm that uses chatbots is Excalibur Insurance, a property and casualty insurance broker with offices in Clinton, Mitchell, Wingham and Exeter.

“Chatbots are actually one of best fits for any of the artificial intelligence-based technologies for the insurance industry. That is because the insurance industry is still highly manual,” Maynard said, commenting in general and not on any particular company.

Chatbots are not as good as humans at understanding questions, which is why a human needs to be available to take over if necessary. But over time, chatbots will get better at understanding questions, suggested Maynard.

“I think in the early days chatbots were only able to handle a very limited ranges of questions and if you got beyond that set of questions, they didn’t have a clue. You just got handed off to a human operator,” said Maynard.

He cited Lemonade and GEICO as examples of American insurers who use chatbots.

“As more and more data is being exposed to these chatbots, they are getting much better at handling unexpected questions, so insurers are feeling more and more confident to put these in customer facing roles,” said Maynard.

Maynard wrote AI in Fintech: Roboadvisors, Lending, Insurtech & Regtech 2019-2023, a report released Feb. 20 by Basingstoke, England-based Juniper Research.

In that report, Juniper noted that chatbots can reduce operational costs in the financial services industry.

“In the insurance industry, you will continue to see these types of tools deployed and experimented with, because it is really a saturated market,” said Maynard. “Everyone who’s going to get insurance pretty much has got insurance, so now it’s become almost as race to the bottom in terms of who can offer the best solution for the least money.”

Artificial intelligence tools including chatbots can help improve efficiency, said Maynard.

“This is what insurers will be looking at and will be a huge priority for them.”