Reprinted with permission from the Auto Insurance Report by Risk Information




The chatbots lurking in the corner of insurance company websites and apps have grown adept at handling many policyholder requests—for now. But consumer expectations are likely to change quickly as buzzy artificial intelligence tools like ChatGPT suddenly make many technologies appear outdated.

Carriers will be challenged to keep pace with the latest language processing AI that is already being implemented into search engines and other online platforms that consumers will likely interact with long before logging into the carrier’s website.

Today, at least, insurer investments in chatbots have achieved parity with those deployed by industries such as banking and online retail that often set expectations, said Justin Suter, research manager of insurance at consulting firm Corporate Insight.




“Customers do not compare you, as an insurer, to the other insurers,” Suter said. “They’re comparing their digital experience toward the other brands that they’re interacting with on a daily basis.” Insurance chatbots could also face growing scrutiny that will only intensify as financial institutions and carriers trust ChatGPT and other AI platforms to solve more complex customer service requests.

A June 6 report from the Consumer Financial Protection Bureau outlines concerns that banking chatbots risk providing inaccurate personal finance information to customers, could fail to protect privacy, and that chatbots may diminish confidence and trust in financial institutions. Those concerns could grow as banks use technology like ChatGPT to answer more complex financial questions. Morgan Stanley announced that it is testing a new chatbot, powered by ChatGPT, to feed scripts to financial advisors, according to the report.

Policyholders often use insurer chatbots today to navigate labyrinthine websites, download new proof of insurance cards, update policy information or even file claims, according to a Corporate Insight survey and report from March. These robotic customer service agents are good at simple service tasks, yet less useful at complicated requests like renewals, or adding and subtracting a driver from a policy, or questions like how a change might impact premium. Rather than attempting to mimic actual conversation, today’s insurance chatbots are essentially interactive guides for Frequently Asked Questions—they are designed to help users follow a pre-mapped digital journey to accomplish the most common customer service requests.

Simply having a chatbot today does not differentiate an insurer, it’s a basic requirement for a website. Speaking at the Auto Insurance Report National Conference in April, Suter said web and mobile chatbots have become so common – and not only in personal banking apps and shopping websites – that organizations with poor customer service reputations now offer decent versions. The New York State Department of Motor Vehicles website has a surprisingly useful chatbot, Suter said. Even lumbering Amtrak offers a virtual assistant with capabilities that outpace some insurance company offerings.

Despite insurer chatbot advances, the J.D. Power 2023 U.S. Insurance Digital Experience Study released May 23 shows there is still room for improvement across carriers’ digital communication efforts.

Insurers are doing a good job addressing online shoppers’ customer service needs, according to the study, but insurer satisfaction scores for helping existing policyholders with apps and websites declined this year. The J.D. Power survey underscores the importance of improving digital experiences for policyholders who increasingly do not want to make a phone call.

Satisfaction scores are lowest when customers cannot find information on an insurer’s website or app and end up having to call the insurer, which happens 42% of the time, according to J.D. Power’s survey.

Corporate Insight’s survey of 1,076 auto insurance policyholders shows about 16% of those with a question for their insurer now turn to chatbots to solve the problem. That still tracks well behind calling their insurer at 41% or calling their agent, also at 41%. There is potential for more chatbot use, Suter said, namely because awareness remains a barrier for growth. About one-third of respondents who called their insurance company did not know whether their carrier offered a chatbot. Half of those respondents said if they knew their insurer offered a bot, they would have used it.

Chatbot users are looking for simplicity and speed, Suter said. Most of them initiated the chat from a mobile device and used the chatbot’s preset menu.

“They want it to be simple, they want it to be fast,” Suter said. “They don’t want to talk to someone. They want to solve their own problem.”

About 42% of chatbot users thought it would be the fastest way to address the issue, 25% thought it would be simpler than calling and waiting on hold, and, counterintuitively, 33% thought it would be the best way to reach a live representative and shorten their wait time.

Survey respondents who had used a chatbot did so the most often for billing or payment (19% of chatbot users), followed by filing a claim (16%), asking a question about an existing claim (16%), and requesting documents (11%).

To evaluate insurer websites and apps, Corporate Insight enlists a panel of actual policyholders who allow Suter and his team to tag along as they file customer service requests and navigate the policyholder-facing websites and apps. Corporate Insight pairs that research with the policyholder surveys.

In 2019, just one of the nine insurer chatbots Corporate Insight studied received an “excellent” rating, compared to four of the 16 it evaluated in March.

With the expanded playing field, the number of “good” chatbots increased to five from four, and “fair” chatbots increased to four from three. The number of “poor” chatbots also increased to three from one.

Of the 16 chatbots that Suter studied in March, Amica‘s is the “gold standard,” he found.

Amica regularly refreshes its chatbot, which boasts a comprehensive pre-set menu with well-mapped customer journeys, he said. The bot menu also features a unique option, “What’s new at Amica?” that is regularly updated.

“It’s very clear to a customer that this is not a stale offering,” he said.

The other four chatbots to receive an “excellent” rating were Chubb, The Hartford and Metromile.

The most effective chatbots greet users with a clear pre-set menu offering obvious solutions to the most frequent requests—billing, policy changes, or the opportunity to talk to an agent or a live representative, Suter said.

Best-in-class chatbots such as Amica’s retain the conversation history even as users log in and out of the policyholder site, according to Corporate Insight’s report. Similarly, excellent chatbots evaluated by Corporate Insight retain a conversation history within the same window if users initiate a live chat. Like Amica’s, the best chatbots also offer additional educational and contextual information that is not strictly transactional. (Amica also ranked highest for digital customer satisfaction in J.D. Power’s recent survey.)

Even among the best insurer chatbots today, it’s incredibly obvious a user is talking to a computer, Suter said. “That’s where some of the natural language processing can start to massage the messaging around it in the future,” he said.

Some insurer chatbots today will respond effectively to typed requests from policyholders—if the user sticks to simple keywords like “quote.” But most chatbots struggle to respond to “free text” prompts from policyholders who may attempt to chat with the bot like it’s a real person.

There are other opportunities for improvement today among insurer chatbots that wouldn’t necessarily involve more advanced tech. Most insurer chatbots will direct a consumer to the page or menu to find a quote or update policy information, for example, but the bot doesn’t stay with the user on the same page to offer additional guidance.

Often, the “chatbot can direct you to the right spot to maybe make a policy change, but once you’re there, it feels like it’s done its job,” Suter said. Amtrak’s chatbot, in contrast, stays on the page with the traveler as they navigate the website to book a trip.

“It’s giving you additional information about where you are, what you can do, and some help resources if you’re struggling,” he said.

Carriers could also add additional language options. In 2023, Geico was one of the few chatbots reviewed by Suter to offer help in Spanish.

Geico, which received a “good” rating from Corporate Insight, introduced one of the first insurer chatbots and has made gradual improvements over the years. For example, initially it hid the pre-set menu behind the expandable “hamburger” style menu—three horizontal lines in the bottom left—that a user would have to know to click to see available options. Now it greets users with the pre-set menu front and center in the chat window. Policyholders can click “make a payment,” “get proof of insurance” and other options without having to type a request to the bot.

Still, it does a poor job with “free text” entries entered by users. When Suter told the chatbot “I would like to change my coverages,” it replied, “Do you want to change your address?”

Artificial intelligence chatbots in the future similar to ChatGPT, which can field questions and respond in a fluid, human-like manner, could quickly change expectations for chatbot ability. It would no longer be acceptable for a bot to rely on pre-set menu options—a consumer might expect the ability to type a question precisely or clumsily and the bot should know the answer and provide contextual information to support it.

“I would definitely expect us to revise our standard for what an excellent chatbot is two years from now from what an excellent chatbot is today,” Suter said.

Reprinted with permission from the Auto Insurance Report by Risk Information